An energy company chief executive is touting a Stark County well’s early oil production, saying it rivals highly publicized wells in Texas.
The Frank well, off state Route 619 in Marlboro Township, is producing 515 barrels of energy equivalents a day — and with a desirable high liquid content and little natural gas, Mark Houser, chief executive of Texas-based EV Energy Partners LP, said in a company report to industry analysts.
He said 40 percent of the equivalents are in light crude oil and 40 percent are in natural gas liquids, including ethane and propane. Low prices for natural gas have resulted in energy companies turning more attention to oil and gas liquids that can produce more revenue.
EV Energy Partners is “cautiously very encouraged” by the oil results from the Marlboro well, Houser said.
“We’re starting to see the evidence of real oil wells,” he said. “The reservoir is flowing oil in commercial quantities.”
Based on the early results from Marlboro Township, drilling in eastern Ohio’s Utica shale formation might surpass the much-touted Eagle Ford shale in Texas, Houser said.
“The Frank well actually looks better than very early stage Eagle Ford wells,” he said.
Until recently, Carroll and Harrison counties were Ohio’s Utica shale drilling hot spots for natural-gas liquids. Now drillers are looking a little farther west in a search that probably will bring increasing interest in an area, called a window, under the ground of Stark, Tuscarawas, Guernsey and Noble counties.
“We feel extremely good about what’s happening, both in the wet-gas window and the oil window,” EV Energy Partners Executive Chairman John B. Walker said.
Houser’s and Walker’s views, and related developments from EV Energy Partners, surfaced in the past week as the company and other players in the oil and gas industry issued second-quarter 2012 financial reports and held earnings calls that are providing a more-detailed look at what’s happening in eastern Ohio.
Many companies to this point have been secretive about what they are doing and what they are finding as the Utica shale boom takes off.
Chesapeake Energy Corp., Gulfport Energy Corp. and Antero Resources Corp. also have documented promising results from their initial Ohio wells in recent reports. Devon Energy Corp. said it was disappointed by results from two wells in Medina and Ashland counties and might move slightly east as companies search for the sweet spot thousands of feet underground.
To date, Ohio has approved 321 permits, of which 110 wells have been drilled. Only a handful are in full production.
“The liquids window does seem to be moving a little bit west [from the locations of early wells in eastern Ohio],” Houser told analysts in an earnings call Friday. “I think we’ll see a lot more on that over the next little while, but these recent announcements [by other companies] are certainly encouraging with that.”
On Aug, 7, Gulfport Energy Chief Executive James D. Palm also indicated that his company is eager to develop wells in the oil window.
“We’re seeing real strong performance over there,” he told analysts. “The big takeaway is that just as we expected, we’re getting oil here. We’re getting better BTUs. Everything is moving to the west. When you go to the west, you get more of those liquid components, and that’s the best takeaway we’ve got.”
The oil wells are also shallower and less costly in that area, about $6 million per well, he said.
Gulfport likes what has been found in Harrison, Belmont and Monroe counties, but most of its drilling probably will migrate to the west, Palm said.
“We want to find out about the east, but next year, if it’s the same it is today, we’ll basically be drilling the west side,” he said.
The company intends to drill 200 wells in the next four years in the target western area, officials said.
No. 3 rank possible
Key questions remain: West of what? And how far west?
Companies will know more as additional wells are drilled to give them a better picture.
An industry analyst told an Akron audience Monday that Ohio could become a major oil state thanks to the Utica shale.
Steve Fillingham, of Colorado’s Energy Analysts International Inc., said Ohio could produce 250,000 barrels of oil a day, perhaps as many as 500,000 barrels.
That would rank Ohio as the No. 3 producer of shale oil and natural gas, after North Dakota and Texas.
Houser said the Marlboro Township well is yielding 200 barrels of oil a day — enough to produce a solid financial return because drilling costs are dropping.
His company is expecting production to rise after equipment is installed to increase liquid lift within the well and a 14-mile pipeline is completed to market the well.
In addition to oil, the well is producing gas liquids: about 45 percent ethane and 55 percent propane, the company said.
About $8 million has been invested in the Frank well, Houser said. It has a horizontal leg that is more than 6,600 feet long. The well was hydraulically fractured, or fracked, in 24 stages.
It is one of four wells the company has completed in which it also owns a working interest.
The Habrun well in Stark County’s Bethlehem Township and the Cairns well in Harrison in Carroll County have been completed, but they are being allowed to settle, or dissipate, before production begins.
The Habrun well is in an oil window; the Cairns well is in a wet-gas window.
The company has also completed a well in the oil window in Guernsey County’s Wheeling Township.
Other companies are finding oil and other liquids in Ohio, Houser said. That includes Anadarko, at three wells in Noble and Guernsey counties, a CONSOL Energy well in Tuscarawas County and an Antero well in Noble County.
EV Energy Partners is interested in selling off noncore Ohio and northwest Pennsylvania acreage. It intends to test and market that land with a sale, perhaps in 2013, Houser said. He declined to say how many acres the company might be interested in selling or swapping.
Risks associated with the Utica shale have been reduced greatly in the past year, and that makes a sale easier to arrange, he said. EV Energy and other companies are working to improve technology, reduce costs and increase production.
Bob Downing can be reached at 330-996-3745 or email@example.com.