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Friday, July 11, 2014

7-Part Series Examines Why Utica Shale is an Important Oil Play

From Market Realist:
The Utica Shale
The Utica Shale, whose core is primarily in eastern Ohio, is a play that energy players have been watching. According to the U.S. Geological Survey (or USGS), the Utica Shale “contains about 38 trillion cubic feet of undiscovered, technically recoverable natural gas” and “a mean of 940 million barrels of unconventional oil resources and a mean of 208 million barrels of unconventional natural gas liquids.”

Enlarge Graph 
The play has been building momentum over the past several years since Chesapeake (CHK) revealed its involvement in the play in late 2011. As of June 28, 2014, the play had 41 rigs, 470 horizontal wells producing, 926 horizontal wells drilled, and 1,386 horizontal wells permitted, according to the Ohio Department of Natural Resources and the Pennsylvania Department of Environmental Protection. 
The Utica numbers for 2013 look like this in comparison to 2012: 
• Gas production – 100.1 billion cubic feet versus 12.8 billion cubic feet
• Oil production – 3.7 million barrels versus 636,000 barrels
• Operating wells – 352 versus 85 
It’s important to note that 3.7 million barrels of oil is 22.2 billion cubic feet equivalent of natural gas by energy content. So, 2013 total production was 122.3 billion cubic feet equivalent and roughly 18% oil versus 72% natural gas. 
Higher oil production in the Utica Shale will benefit the companies engaged in production in the area. Some of the major players who are actively drilling, exploring, and producing oil in the Utica Shale include Chesapeake Energy (CHK), Antero Resources (or AR), CONSOL Energy (CNX), and EV Energy Partners (EVEP), among others. Some of these companies are components of the Energy Select Sector SPDR (XLE) and the SPDR S&P Oil & Gas Exploration & Production (XOP). 
Continue reading the next sections in this series to learn more about why you should pay attention to this emerging play.
Click here to see the other 6 parts of this series.

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