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Ohio Utica Shale

Ohio expects 19,000 Utica wells in next 19 years, report says

By Bob Downing Published: March 18, 2014

Ohio is projecting that more than 19,000 new Utica shale wells for natural gas and liquids will be drilled in eastern Ohio in the next 19 years.

That’s how many wells would fit on the 3 million acres in eastern Ohio without any Utica shale wells at the moment, said Ohio state geologist Mike McCormac in his not-yet-released report.

That assessment is the most-recent analysis showing that the Utica shale is likely to have long-term economic impacts for Ohio.

Said McCormac: "So again, that could be 19 years; that could be 25 years; that could be 15, 16 years. It’s hard to say right now. What we’re trying to do here is just show the potential for a lot of activity exists. It’s not going to be like a two- or three-year thing….And I think this demonstrates more of the long haul."

He said developing such projections is important so the ODNR can maintain needed staffing to oversee the Utica drilling.

McCormac’s 19-year estimate looks only at land available for drilling in the 11 core Utica counties, he said.

The 19,000 well total will likely be fewer, he said. His estimate is based on 160-acre tracts and drillers are likely to assemble bigger parcels, he said.

The estimate surfaced in a Feb. 11 presentation to the Ohio Oil and Gas Commission, an advisory panel. Part-timer McCormac, now out of the country, presented a sneak peak to the panel of his much-awaited annual Ohio drilling report.

The information comes from a transcript of McCormac’s presentation that was released by the agency.

His full report has not yet been released by ODNR’s Division of Oil and Gas Resources Management. It will likely be released in April, after final data is received, said agency spokesman Mark Bruce.

According to McCormac, drilling companies have probably spent $6 billion on drilling in Ohio, plus another couple billion on leases. Processing plants and pipelines have been estimated at $12 billion to $16 billion, he said.

That means that the Utica shale has triggered $20 billion to $24 billion in spending in Ohio, to date, he said.

In a separate item, McCormac reported that Ohio’s capacity for gas processing is projected to nearly double this year and liquids processing will more than triple in 2014.

The state’s gas processing is expected to jump from 1.325 to 2.525 billion cubic feet per day and the liquids processing is expected to jump from 81,000 barrels to 254,000 barrels per day from 2013 to 2014, he said.

"So that’s significant," he said.

Ohio has been closely tracking that capacity for more than a year, he said.

Here are some of the other interesting items from McCormac’s report.

•In early January, Belmont County had nine drilling rigs working. Carroll County had six; Harrison County had 11; and Monroe County had eight.

Ohio had 11 drilling rigs working in 2011. In 2012, the number was 21. It jumped to 33 in 2013. The number is likely to average 45 in 2014. That is evidence of a lot more Ohio activity, he said

The typical rig in the Utica shale can drill 16 wells a year.

•ODNR is projecting 720 drilled Utica wells in 2014. Ohio is expecting to get 700 new Utica shale permits in 2014 and 800 in 2015.

Carroll County is No. 1 for Utica permits with 376. Harrison County is No. 2 with 173. Previously, Carroll had a larger margin over Harrison, so the data shows that activity has intensified in Harrison County, he said.

In Carroll County, 302 of the permitted wells have been drilled and of those 149 are in production.

•Oklahoma-based Chesapeake Energy has 584 Utica permits. No. 2 is Oklahoma-based Gulfport with 109 and Colorado-based Antero Resources has 62.

Chesapeake is five times more active than other Utica players. "That’s not real surprising because they kind of got in here early and fast and everyone else is kind of in a, you know, catch-up stage," he said.

The Top 10 operators in Ohio account for 90 percent of the permitting, the drilled wells and the wells in production.

•Ohio has 425 wells that have been drilled but are not yet in production. That is due to delays in pipelines and gas-processing facilities, he said. That infrastructure bottleneck won’t be eliminated until the end of 2014, he said.

"Every operator we’ve talked to says they’re six months to a year and a half behind where they hope to be," he said. "It just takes time, you know. Obviously, our (land) titles in Ohio are challenging and then the logistics."

•New companies like American Energy Partners and Rice Energy are entering the Utica shale. Only a few permits are being issued in Trumbull, Washington and Morgan counties, but companies have not given up on those counties, McCormac said.

•The companies are "going to keep bumping west" in search of volatile oil and regular oil, he said. It is unclear how far west the drillers might find success or how it might take to successfully tap the so-called oil windows, he said.

•Typical Utica drilling time is 22 to 23 days, perhaps down to 18 days in some cases. The price is a Utica well is still $8 million to $10 million.

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Utica and Marcellus shale web sites

Ohio Department of Natural Resources' Division of Oil and Gas Resources Management State agency Web site.

ODNR Division of Oil and Gas Resources Management. State drilling permits. List is updated weekly.

ODNR Division of Geological Survey.

Ohio Environmental Protection Agency.

Ohio State University Extension.

Ohio Farm Bureau.

Ohio Oil and Gas Association, a Granville-based group that represents 1,500 Ohio energy-related companies.

Ohio Oil & Gas Energy Education Program.

Energy In Depth, a trade group.

Marcellus and Utica Shale Resource Center by Ohio law firm Bricker & Eckler.

Utica Shale, a compilation of Utica shale activities.

Landman Report Card, a site that looks at companies involved in gas and oil leases.FracFocus, a compilation of chemicals used in fracking individual wells as reported voluntarily by some drillers.

Chesapeake Energy Corp,the Oklahoma-based firm is the No. 1 driller in Ohio.

Rig Count Interactive Map by Baker Hughes, an energy services company.

Shale Sheet Fracking, a Youngstown Vindicator blog.

National Geographic's The Great Shale Rush.

The Ohio Environmental Council, a statewide eco-group based in Columbus.

Buckeye Forest Council.

Earthjustice, a national eco-group.

Stop Fracking Ohio.

People's Oil and Gas Collaborative-Ohio, a grass-roots group in Northeast Ohio.

Concerned Citizens of Medina County, a grass-roots group.

No Frack Ohio, a Columbus-based grass-roots group.

Fracking: Gas Drilling's Environmental Threat by ProPublica, an online journalism site.

Penn State Marcellus Center.

Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.

Allegheny Front, environmental public radio for Western Pennsylvania.