Chesapeake Surprising Some With Strong Projections For Utica Shale
|Some are surprised that Chesapeake sees
the Utica shale as a big growth driver
Just a month after BP decided to take a $521 million hit to abandon its plans for the Utica Shale, Chesapeake Energy last week called the region its “newest world-class asset.”
It was the second surprising determination that Chesapeake executives made this year on where the company could find its biggest future growth drivers. The first out-of-the-blue call came in February, when the Oklahoma City-based oil and gas producer told investors it would march back into the gas-rich Haynesville Shale in northwestern Louisiana, East Texas and southwestern Arkansas.
The Utica, an Ohio shale play that operators originally believed would yield large bounties of pure oil, turned out to have much bigger deposits of natural gas and natural gas liquids. Chesapeake and others “whiffed” on the Utica a few years ago, but now the company believes it’s going to be “a big growth driver,” said Jason Wangler, an analyst with Wunderlich Securities in Houston.
Chesapeake officials said Friday they believe the Utica holds more than 4 billion barrels of recoverable resources, and that the play will deliver 45-percent returns this year. After ramping up to seven to nine operated rigs, the company is aiming to boost its production in the region to almost 10 times its level two years ago. It’s a switch that could bring on a lot more natural gas production for Chesapeake.Read the entire article by clicking here.
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