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Thursday, May 23, 2013

Another Defense of the Utica Shale and Its Gas Potential

From RBN Energy Network:
For example, in advance of the ODNR data announcement last week several independent producers published optimistic Utica Point Pleasant drilling results for the first quarter of 2013. The third largest Utica producer, Gulfport Energy said that their first fourteen wells averaged an initial production rate of 807 b/d of condensate, 7.8 MMcf/d of natural gas and 946 b/d of NGLs. The production mix was 36 percent condensate, 36 percent natural gas, and 28 percent natural gas liquids – that is 64 percent liquids, and that is very good news for well economics.   
Another misunderstanding about the ODNR data is that many more wells have been drilled than are actually in production. To date, Ohio has approved permits for 660 shale wells of which 326 have been drilled and only 97 are now in production.  That is because producers are holding off bringing wells into production until pipelines, natural gas processing plants and other infrastructure is complete. The largest Utica player, Chesapeake, reported only moderate Utica Shale production growth last year because they were sitting on wells and waiting for infrastructure. At the end of the third quarter 2012, nearly 40 Chesapeake operated Utica Shale wells had been drilled but were not yet producing. Since these wells are not producing they do not show up in the ODNR production data and the lack of “actual” production weighs heavy on analysts used to hearing about dramatic increases in production every month in North Dakota. In this environment, no news is viewed as bad news.
Read more here.

Are the doomsday reports that declare the Utica shale a bust overlooking critical factors in the ODNR's 2012 Utica shale production report?  Share your thoughts in the comments!

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