Wednesday, April 17, 2013

UPDATED: Bloomberg Declaring the Utica an Oil Bust in Advance of Official Production Report

Industry media arm Energy in Depth has responded to Bloomberg's article.  In short, EID says that Bloomberg's report indicates that there is a mass exodus by energy companies from the Utica shale - and that just isn't true.  Here is an excerpt:
In its recent coverage of the Ohio shale industry, Bloomberg News suggested that the oil and gas industry is leaving Ohio in droves. It’s fitting that baseball season is underway, because the report was an unequivocal swing and miss.
The central problem with Bloomberg’s narrative is that it only focused on oil development, and thus completely ignored the amazing story of the natural gas liquids (NGLs) activity occurring in eastern Ohio.  And that liquids story is nothing to cast aside so easily. In fact, thanks in large part to NGLs, the oil and gas industry is already helping Ohio return to economic prosperity, employing 38,000 people in the state — a number that will only continue to grow.
More specifically, the increasing investment in Ohio is due to the vast potential of NGLs in the Utica/Point Pleasant formation in the eastern part of the state.  For this reason, Ohio has already seen over $7 billion worth of natural gas processing and infrastructure investment from midstream companies like MomentumMarkwest, Dominion and Caiman Energy. In addition, Ohio currently has 20 different operators developing in the Utica Shale of eastern Ohio.  Major companies like HalliburtonSchlumberger and Baker Hughes are also setting up shop here in Ohio to provide well servicing for the operators. 
If Bloomberg News thinks companies are packing up and leaving the state, it would certainly be news to these multi-billion dollar firms who are investing in Ohio for the long haul.
Read the whole response here.

ORIGINAL POST:

From Bloomberg:
U.S. drillers that set up rigs amid the rolling farmland of eastern Ohio on projections underground shale held $500 billion of oil are packing up.
Four of the biggest stakeholders in untapped deposits known as the Utica Shale have put up all or part of their acreage for sale, as prices fall by a third in some cases. Chesapeake Energy Corp. (CHK) of Oklahoma City, the biggest U.S. shale lease owner, last week offered up 94,200 acres (38,121 hectares). EnerVest Ltd. and Devon Energy Corp. (DVN) are selling as early results show lower production than their predictions.
“The results were somewhat disappointing,” said Philip Weiss, an analyst with Argus Research in New York. Early data show “it’s not as good as we thought it was going to be.”
Read the whole article here. 

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