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Friday, January 6, 2017

Analyst Says Utica Shale a Key Consideration for Potential Chesapeake Investors

From Seeking Alpha:
Chesapeake Energy Corporation (NYSE:CHK) had a massive 1.1 million net acre position in the Utica Shale as of its October 2016 update. In light of its 2015 midstream agreement, rising domestic gas prices, and additional takeaway capacity coming online in 2017, this is a key asset to watch when considering investing in Chesapeake Energy Corporation. 
Investors should note that Chesapeake Energy did sell off 37,000 net acres in the Utica, along with 22 producing wells and five DUCs (drilled but uncompleted wells) in Q4. During the first half of 2016, those producing wells pumped out an average of 24 MMcf/d of natural gas. That acreage was centered around Columbiana County in NE Ohio and Beaver County in Western Pennsylvania, outside of Chesapeake's core Utica focus in Eastern Ohio.

During the third quarter of this year, Chesapeake Energy Corporation pumped out 127,000 BOE/d net from the Utica. That was down 10,000 BOE/d from Q2 2016 but up 21,000 BOE/d versus Q3 2015. With two rigs now operating in the Utica as of Q3, the upper-end of its guidance over the next couple of years, Chesapeake's Utica output (particularly dry gas) should perk up.
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