Utica Shale

USGS Releases Assessment of Utica Shale

The U. S. Geological Survey (USGS) has released its first assessment of the Utica Shale in the United States and reported that this formation holds 38 trillion cubic feet of undiscovered, technically recoverable natural gas (mean estimate).

The USGS also said that the Utica Shale contains a mean of 940 million barrels of crude oil resources and 9 million barrels of natural gas liquids.  Although most industry development has been in Ohio and Pennsylvania, the survey also assessed the Upper Ordovician Utica Shale in Maryland, New York, Virginia, and West Virginia.

The estimated range of undiscovered resources is as follows:

Crude oil - 590 million barrels to 1.39 billion barrels

Natural gas - 21 to 61 TCF

Natural gas liquids - 4 to 16 million barrels

The USGS defines technically recoverable oil and gas resources as “those quantities of oil and gas producible using currently available technology and industry practices, regardless of economic or accessibility considerations.”  Here is a map of the area assessed by the USGS

Dominion Resources To Build Natural Gas Processing Facility In West Virginia

Dominion Resources (D) announced that the company would build a natural gas processing and fractionation plant in West Virginia.  The facility will handle production coming out of the Utica and Marcellus Shale. Other details:

1. The Utica Shale plant will be built on the Ohio River in Natrium, West Virginia.
2. Phase one is expected to be operational by December 2012.
3. Natural gas processing capacity of 200 million cubic feet of natural gas per day
4. Fractionation or liquids separation capacity of 36,000 barrels per day.
5.  Ninety percent of capacity of phase one is already contracted.
6. Final capacity of 400 million cubic feet of natural gas per day and fractionation of 59,000 barrels of natural gas liquids per day.

Dominion Resources said that the largest customer that has contracted for capacity at the Natrium facility is Chesapeake Energy (CHK). The company has for 100 million cubic feet per day under contract in phase one and an option for phase two.

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.