Ohio’s Utica shale is generating big production numbers, although it’s been a slow process and some experts were hoping for even bigger numbers.
The state on Thursday released production data from 87 Utica wells drilled by 11 companies — with the wells producing 12.8 billion cubic feet of natural gas and so-called natural gas liquids and 635,896 barrels of oil in 2012.
That means the average well produced a modest 1.6 million cubic feet of natural gas per day plus 80 barrels of oil.
Ohio’s oil production grew by 93 percent and 80 percent for natural gas from a year earlier.
The long-awaited report offers a first glimpse of the true potential of the Utica shale under eastern Ohio. The data appear to show that the Utica shale will be dominated by natural gas more than oil. The oil volumes were lower than had been projected, and that’s likely a disappointment to analysts and energy companies.
“It’s shaping up largely as a natural-gas play,” said Tom Stewart, executive vice president of the Ohio Oil and Gas Association. “I’m not disappointed or discouraged by the numbers. … But this is a process that takes time to develop.”
It is possible that large quantities of oil may still be found in sections of the Utica shale in Ohio, he said.
The Utica shale is “the real deal,” said James Zehringer, director of the Ohio Department of Natural Resources at a Columbus news conference.
The natural gas volume may be disappointing to some but the lack of pipelines and processing plants in Ohio has slowed the development of its Utica shale, officials said in unveiling the data.
Ohio’s total compares to 2 trillion cubic feet of natural gas in Pennsylvania’s Marcellus shale and 455 billion cubic feet in West Virginia in 2012.
The Marcellus shale, however, lacks the Utica shale’s mix of natural gas and lucrative liquids: oil and natural gas liquids (ethane, butane and propane).
Of the 87 Ohio wells, only two were in production for more than 300 days in 2012 and 74 were in production for less than half a year, hurting Ohio’s production totals, officials said.
The 87 wells were in production for a total of 7,979 days in 2012, according to the report.
Utica shale wells represent two tenths of 1 percent of Ohio wells yet those 87 wells produced 12 percent of Ohio’s oil and 16 percent of Ohio’s natural gas in 2012.
One horizontal well in the Utica shale produces as much oil as 312 vertical-only wells and as much natural gas as 448 vertical-only wells, Zehringer said.
Ohio’s Utica shale has “a very bright future,” he said. “The production from these initial Utica wells makes a compelling statement about the staggering amount of oil and gas resources Ohio’s shale appears to contain.”
“Utica shale is off to a strong start … but its best is yet to come,” said David Mustine, managing director of JobsOhio, the economic development agency created by Ohio Gov. John Kasich.
Ohio is projecting that Utica wells will produce 73 percent of Ohio’s oil and 82 percent of its natural gas by 2015.
State officials estimate that Ohio will have 1,012 drilled Utica wells producing oil and natural gas and natural gas liquids by 2015, said Rick Simmers, chief of the Division of Oil and Gas Resources Management.
The state projects there will be 362 Utica shale wells in production by the end of this year.
By the end of 2014, the state estimated there will be 662 Utica wells in production.
“This is significant growth,” Simmers said.
It is expected that Ohio’s Utica production will exceed the yearly production of the state’s 51,000 existing vertical-only wells by early 2015, he said.
The projected volume of natural gas in 2015 is 146 billion cubic feet in addition to 7.2 million barrels of oil and natural gas liquids, his agency said.
The list was dominated by Chesapeake Energy Corp.’s 53 wells. Chesapeake expects to quadruple its Ohio production by the end of 2013 with the completion of pipelines and processing plants that will allow more wells to be hooked up plus new wells drilled in 2013.
The report also lists 688,458 barrels of brine that were produced by the 87 wells.
The report offers the second official production data from Ohio’s Utica shale wells, figures that have been sought for months by financial analysts.
Most production data have been tightly guarded secrets by the energy companies, although some firms provided limited information on Ohio wells. Ohio requires drillers to report results only once a year. The deadline was March 31. Ohio has approved Utica shale permits for 660 wells.
Of that total, 326 wells have been drilled and 97 are now in production, as of May 11, according to the state. Carroll County has the highest number of wells in the state. A total of 31 drilling rigs are working in Ohio. Last year’s Ohio production report offered little insight into the emerging Utica shale. That’s because the report covered only nine horizontal wells. There were six wells in Carroll County and one each in Portage, Harrison and Mahoning counties.
Five of those wells were in production in 2011 and generated nearly 2.6 billion cubic feet of natural gas, plus 43,513 barrels of oil. The other four wells produced no natural gas in 2011, but oil was recovered during completion. The four wells each produced less than 1,000 barrels of oil in 2011.
The report is available at http://oilandgas.ohiodnr.gov/production.
Bob Downing can be reached at 330-996-3745 or firstname.lastname@example.org. Jim Mackinnon can be reached at 330-996-3544.