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Wednesday, April 30, 2014

BP Folds Up Tents, Abandons Utica Shale Drilling

BP made a big splash in 2012 when the company leased about 85,000 acres in Trumbull County for over $330 million.  The company maintained that it was excited about its Utica shale prospects afterwards, even as other drillers in the northern part of the play expressed disappointment with what they were finding there.

Now, only a couple of years later, BP is abandoning its Utica shale holdings.  The company announced it with this brief statement while reporting its 2014 first quarter results:

“Following on from the decision to create a separate BP business around its US lower 48 onshore oil and gas activities, and as a consequence of appraisal results, BP has decided not to proceed with development plans in the Utica shale. The Upstream result includes a write-off relating to the Utica acreage.”

Trumbull County has proven to be an economically untenable location for Utica shale drillers because the shale there has yielded mostly dry gas, but it could reemerge as a target if the economics of natural gas change.

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