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Ohio Utica Shale

Texas firm continuing to work on Ohio shale land sales

By Bob Downing Published: November 10, 2012

A Texas-based energy company and its parent are working to complete the sale of a key portion of eastern Ohio holdings, but the deals on an estimated 539,000 acres at the heart of Ohio’s Utica shale are not yet finalized.

EV Energy Partners LP, the publicly traded arm of privately held EnerVest Ltd., expects to complete the sales before Dec. 31, founder and executive chairman John B. Walker said Friday in a teleconference about the company’s third-quarter earnings.

He declined to identify the buyer or buyers on the Utica shale property that could fetch as much as $6 billion for the firm, according to financial experts.

The company has several offers from would-be buyers and is "very comfortable" that the deal or deals will close by the end of the year, he said.

He termed the sale "a very large and sizable transaction" and called the deals complex, with some would-be buyers offering cash and other properties. He likened the deals to assembling a quilt in fitting the pieces together.

He declined to comment on whether the company would get as much as $15,000 an acre for natural gas liquids and even more money per acre for oil areas.

Walker declined to comment on drilling results in the Utica shale because of the pending deals.

The money derived from the sales would go into drilling investments in other areas, the company has said.

The deal is seen as the first market test after more than a year of drilling in the Utica shale.

Financial experts are having difficulty assessing the Utica shale’s potential value because companies have released production data from about 15 wells.

To date, 178 wells have been drilled in Ohio, of which 36 are producing natural gas, oil and natural gas liquids such as ethane, butane and propane.

Previous deals including a $3.4 billion joint venture with EnerVest, Chesapeake Energy Corp. and Total SA occurred before widespread drilling got under way. That deal covers 619,000 acres in 10 Ohio counties.

EnerVest announced in September that it intended to sell the Utica acreage.

That decision came after executives said the firm has no desire for the risk and expense of developing the Utica shale formation where horizontal wells cost in excess of $6 million.

The Houston-based firm said it intends to keep the shallow Clinton wells and the deeper Knox wells it owns in Ohio, plus its share in Utica processing facilities and other financial interests such as royalties.

The acreage being sold by EnerVest is a net figure consisting of tracts it owns outright and properties co-owned with other companies, some of which operate wells.

It is marketing its Utica formation rights and has 150,000 net working acres in Ohio.

 

The buyers will become Chesapeake’s partner on the wells drilled in the joint venture that is projecting 500 wells by Dec. 31, 2014.

EnerVest is holding onto 231,000 net Utica acres in Ohio where the potential is not as well established.

The company has accumulated about 1.2 million acres in Ohio and has more than 8,700 conventional wells in Ohio.

It produces 25 percent of the natural gas that was produced in Ohio before the Utica shale boom. It is the largest producer of conventional gas and oil in Ohio.

Last August, the company released well data on two Ohio horizontal wells: one in Stark County’s Marlboro Township and one in Carroll County.

It has spent about $1.2 billion on land acquisition in Ohio over the last 10 years.

EnerVest, a holding company, raises funds from institutional investors and pension funds.

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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.