Utica Shale

Chesapeake Energy Reports Results of Four Utica Shale Wells

Chesapeake Energy (CHK) reported the production results of four wells drilled and completed into the Utica Shale in Ohio and Pennsylvania.  The company has drilled a total of twelve wells into the play.

The Buell 10-11-5 8H produced at a peak rate of 3,010 barrels of oil equivalent (BOE) per day composed of 9.5 million cubic feet of natural gas and 1,425 barrels per day of natural gas liquids and oil. The Buell 10-11-5 8H is located in Harrison County, Ohio, and was drilled with a lateral of 6,418 feet.

The Mangun 22-15-5 8H produced at a peak rate of 1,530 BOE per day composed of 3.1 million cubic feet of natural gas and 1,015 barrels per day of natural gas liquids and oil. The Mangun 22-15-5 8H is located in Carroll County, Ohio, and was drilled with a lateral of 6,231 feet.

The Neider 10-14-5 3H produced at a peak rate of 1,615 BOE per day composed of 3.8 million cubic feet of natural gas and 980 barrels per day of natural gas liquids and oil. The Neider 10-14-5 3H is located in Carroll County, Ohio, and was drilled with a lateral of 4,152 feet.

The Thompson 3H produced at a peak rate of 6.4 million cubic feet per day of natural gas. The Thompson 3H is located in Beaver County, Pennsylvania, and was drilled with a lateral of 4,322 feet.

Chesapeake Energy said that the Utica Shale production rates disclosed assume maximum ethane recovery by the company, although currently minimal amounts of ethane are being recovered due to temporary market limitations.

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.

Rex Energy - More Details On Utica Shale Development From Conference Call

Rex Energy (REXX) held a conference call on August 3, 2011, and discussed additional operational details on the company’s expanding Utica Shale position.

Rex Energy is moving a rig to drill the horizontal leg of a Utica Shale test well in Butler County, Pennsylvania.  This rig just finished a six well pad drilling operation into the Marcellus Shale and Burkett Shale in Pennsylvania.

The name of the Utica Shale well is Cheeseman and Rex Energy expects results from this well in the fourth quarter of 2011.  The Cheeseman well is eleven miles south of the Zion well drilled and completed by Range Resources (RRC)

Rex Energy said that the Warrior Prospect has approximately 80 net drilling locations based on 4,000 foot laterals, with 1,000 foot spacing between the laterals.  Union Drilling (UDRL) will construct a new rig to be used by Rex Energy to develop the play.

Rex Energy comments on Utica Shale Geology

• Utica Shale is Ordovician age and is the source rock for the overlying Silurian sandstones and Cambrian carbonates and sandstones in Ohio.
• Although the total organic carbon content from 2.4% to 3.7% is low compared to other shale plays, the thickness of the shale makes up for this. The Utica Shale in eastern Ohio is 150 feet thick and the Point Pleasant Formation is 140 feet thick.
• The Utica Shale is mature enough in the area that Rex Energy is involved with to produce wet gas.