Energy company BP announced on Tuesday that it is scrapping plans to drill Utica shale wells in Northeast Ohio.
The company has about 105,000 leased acres, mostly in Trumbull County near Warren.
But the results from the company’s initial Utica wells were not promising.
The London-based company acknowledged its termination of the Utica shale drilling in a press release.
"Following on from the decision to create a separate BP business around its lower 48 (states) onshore oil and gas activities, and as a consequence of its appraisal results, BP has decided not to proceed with development plans in the Utica shale," the company said.
It was another blow for the northern part of the Utica shale. Texas-based Halcon Resources in March had stopped its drilling in the Trumbull-Mahoning area because of poor results.
The Utica shale in those two counties is rich with natural gas but is lacking liquids that are desired by drillers, especially with low prices being paid for natural gas.
BP said on Tuesday that it would take a $521 million write-off for the Ohio Utica shale. That document was filed with the U.S. Securities and Exchange Commission.
It said it intends to sell its Utica acreage to other drilling companies as quickly as possible.
In 2012, BP had spent more than $300 million to secure leases on about 84,000 acres from a landowners’ group in Trumbull County.
The company was a latecomer to Ohio’s Utica shale.
It had drilled four exploratory wells in northern Trumbull County. No new wells have been drilled by BP in the last eight months.
A state production report released last Friday offered a first glimpse of Trumbull County results.
BP America Production Co. reported less-than-stellar initial data from three wells in Trumbull County.
A well in Hartford Township was the company’s top gas producer in the quarter with 20,322,000 cubic feet in 75 days of production.
A well in Johnston Township was the company’s top oil producer in the quarter with 1,889 barrels in 92 days of production.
One of the four BP wells reported zero production because connecting pipelines were needed.
Those results pale in comparison with some of the biggest-producing Utica wells in eastern Ohio.
The company had said very little about its Utica wells or its intentions.
BP was one of only three companies interested in the northern part of the Utica shale.
Halcon and CNX Gas Co, a CONSOL Energy subsidiary, were the two other firms interested in the northern Utica area.
Halcon has eight wells in development in Trumbull County. CNX has one well and Brammer Engineering has two wells.
Other companies have been successful farther to the south in Carroll, Harrison, Belmont, Monroe and Guernsey counties.
Said Shawn Bennett of Energy in Depth-Ohio, a pro-drilling trade group: "The core of the Utica remains to be very prolific for the companies operating in those areas.
"As we have seen with recent announcements by companies operating outside of the core, there is still work that needs to be done in those areas to improve results. This is not unique to the Utica and happens in every shale play across the United States. The industry will continue to refine completion techniques while lowering drilling costs for each of their wells. As these efforts come to fruition, this will allow the economical window of this play to grow." he said.