Utica Shale

CONSOL Energy To Spend $50 million In Utica Shale In 2012

CONSOL Energy (CNX) approved a $1.7 billion capital budget for 2012 and plans to spend $50 million in the Utica Shale, up from only $3 million in 2011.  The funds will be used to drill 11 net wells during the year.  CONSOL Energy estimates that the company’s drilling in the Utica Shale through 2015 will be:

2012 – 11 net wells

2013 – 27 net wells

2014 – 33 net wells

2015 – 33 net wells

CONSOL Energy said that in 2012, all the Utica Shale wells will be drilled in the oil window or wet gas area of the play.  CONSOL Energy is involved in a joint venture with Hess Corporation (HES) in the Utica Shale.

CONSOL Energy - Utica Shale Summary

CONSOL Energy (CNX) is active in the exploration and development of the Utica Shale and has 200,000 net acres under lease in Ohio that is prospective for this play.  The company also has additional acreage in Pennsylvania and West Virginia that has exposure to the Utica Shale.

In October 2010, CONSOL Energy reported the results of the company’s first well into the Utica Shale.  The Barnesville #1 well was drilled and completed in Belmont County, Ohio, and produced 1.5 million cubic feet of natural gas per day during a test period. 

The Barnesville #1 Utica Shale well was a vertical well and was not stimulated and this accounted for the low production.  The company plans six additional Utica Shale test wells in 2011 at a cost of $35 million.

Chesapeake Energy - More Utica Shale Details

Chesapeake Energy (CHK) disclosed a 1.25 million acre position in the Utica Shale in Ohio, and plans to develop this leasehold aggressively over the next five years.  During the earnings conference call held on July 29, 2011, the company disclosed additional information on the Utica Shale.

1. Total investment of $1.5 billion to $2 billion to date in the Utica Shale.
2. Most of the permits applied for are in the wet gas area, which the company believes will have the best rate of return.
3. Chesapeake Energy will pursue greenfield development of midstream assets in the company’s subsidiary and then eventually drop the assets down to Chesapeake Midstream Partners.
4. Many of its leases are held by production as the company acquired deep rights from shallow producers.  The balance of the leases are standard five years with a five year extension.