Utica Shale

PDC Energy Enters Utica Shale Play

PDC Energy (PETD) announced the acquisition of leasehold in Ohio that is prospective for the Utica Shale. The acreage is in the wet gas or liquids portion of the play.

PDC Energy is paying $50 million for 30,000 net acres located mostly in Noble, Monroe, Washington, Morgan and Guernsey counties.  The company said that 75% of the acreage is held by production from shallower wells.

PDC Energy plans to drill a vertical test well in the fourth quarter of 2011, followed by two horizontal wells into the Utica Shale in 2012.  The company has an option to drill two additional vertical wells in 2012.

PDC Energy will pay $10 million in 2011 and the balance in 2012 upon title confirmation.  The company will fund the purchase with its credit facility. The company is looking for additional opportunities and plans to increase its Utica Shale leasehold to between 80,000 and 100,000 net acres by the end of 2012.

PDC Energy is also looking for a joint venture partner to share the risk and cost of developing the Utica Shale leasehold.

Four New Utica Shale Permits Issued In Ohio

There have been four new Utica Shale drilling permits issued by the Ohio Department of Natural Resources.

Date	County	Type	Operator	Well
8/18/2011	Columbiana	Vertical	Chesapeake	Weber 35-7-1 8
8/16/2011	Monroe	Vertical	HG Energy	Whitacre Enterprises  701 S-5H
8/16/2011	Tuscarawas	Horizontal	CNX Gas	Troyer Tusc3AHSU
8/16/2011	Tuscarawas	Vertical	CNX Gas	Troyer Tusc3AHSU

CNX Gas is the exploration and production arm of CONSOL Energy (CNX).  Ohio has now issued 53 permits to drill into the Utica Shale through 8/22/2011.  Chesapeake Energy (CHK) is far ahead of other operators and holds 43 of these permits.

Gulfport Energy - Utica Shale Summary

Gulfport Energy (GPOR) is at an early stage of development of the Utica Shale on the company’s acreage in Ohio.  The company has 17,500 net acres and is planning to increase the leasehold to between 55,000 and 65,000 net acres.

Gulfport Energy expects to start drilling in the Utica Shale in 2012 and said that the formation will have an oil window, a wet gas and condensate area and a dry gas portion.  The Utica Shale gets shallower and less mature as you move west across Ohio.

Gulfport Energy is focused on the oil and wet gas areas of the Utica Shale and is looking to pick up more acreage in Belmont, Carroll, Colombia, Guernsey, Harrison, Jefferson, Monroe and Tuscarawas counties.