MAYFIELD HEIGHTS: Ohio’s Utica shale is likely to get a “dramatic ramp-up” in 2014 and may get an even-bigger boost if technologies can be developed to tap its crude oil in the future, said the head of the Ohio Oil and Gas Association.
The Utica shale in eight eastern Ohio counties is an “attractive play” for natural gas and liquids, although efforts to find its crude oil have not been successful, said Tom Stewart, chief executive officer and executive vice president of the statewide trade group.
The Ohio Department of Natural Resources is estimating that 1,180 Utica shale wells will be drilled in Ohio in 2014, he said Thursday at Crain’s Cleveland Business Shale Summit 2014.
At present, Ohio has approved 1,093 Utica shale wells, of which 737 have been drilled and 367 are in production as of Feb. 15.
The number of drilling rigs in Ohio is likely to jump from 40 at present to 60 early next year, based on surveys he has conducted, said David Hill, incoming president of Stewart’s group and a panelist at the daylong conference that attracted about 200 people.
The biggest fears of Ohio drillers are over-taxation and over-regulation, two issues under discussion by the state of Ohio, he said.
Stewart also expressed his group’s concerns over Ohio severance tax proposals in the Ohio legislature.
He said efforts to get crude oil from the Utica shale have largely failed in Ohio and at least two companies have halted Ohio drilling for oil.
But Stewart said he was optimistic that oil could be pulled from the shale in the future as drilling technologies improve. “That’s going to change,” he said.
Initial efforts to get oil from the Bakken shale in North Dakota also failed, he said. “The oil window here has not yet revealed its secret,” he said.
The oil area is believed to extend west of a band from Carroll County south through Harrison, Belmont, Noble, Guernsey and Washington counties, where high-energy natural gas and liquids including ethane, butane and propane have been found, he said.
Several companies have said they intend to experimentally drill for crude oil in the near future in the so-called oil window.
Drillers in Ohio are increasingly interested in the southern part of that fairway, or the area where natural gas and other liquids dominate. That will likely result in more drilling south into Washington County and perhaps Morgan County, he said.
The most-drilled area is Carroll County. The best overall wells in Ohio are in Harrison County, and some of the most productive wells are emerging in Belmont and Monroe counties, he said.
Drillers are still trying to determine whether that fairway extends north into Trumbull and Mahoning counties, he said.
Asked if Portage and Stark counties were to see more Utica shale wells, Stewart said, “We’ll see.”
“Obviously, the Utica is doing well,” said keynote speaker and Texas-based industry analyst G. Allen Brooks. “It is similar to the Eagle Ford shale [in Texas]. The Utica has a lot of promise. It looks like and performs like the Eagle Ford. And that’s encouraging,” he said.
Brooks, managing director of PPHB LP and publisher of Musings from the Oil Patch, said the lack of data from the Utica shale is the biggest problem for drillers and investors. “The promise of the Utica shale is being tested,” he said.
Bob Downing can be reached at 330-996-3745 or email@example.com.