HOUSTON (Dow Jones)–BP PLC (BP, BP.LN) said Tuesday it has signed an agreement to lease 84,000 access in Utica/Point Pleasant Shale in northeast Ohio for future oil-and-gas production. The move makes the European company the latest oil major to enter one of the latest North American oil discoveries.
The terms of the agreement are confidential, but the deal was signed with the Associated Landowners of the Ohio Valley, a group representing area mineral owners, the company said in a press release. The acreage is in Trumbull County, Ohio.
The deal is BP’s first incursion in the Utica/ Point Pleasant formation, a relatively new and very promising shale basin that consists of a potentially significant liquids-rich gas source. The move comes after companies such as Chesapeake Energy Corp. (CHK), Anadarko Petroleum Corp. (APC) and Chevron Corp. (CVX) are exploring for oil and gas in the area.
“We are very encouraged by what we have seen of the Utica/Point Pleasant formation,” said Tim Harrington, regional president for BP’s North America gas business. “Our focus in 2012 will be to better understand the geology and devise a plan to safely develop the resource.”
The Utica/Point Pleasant shale is at a depth of about 6,000 feet and has the potential to deliver higher natural-gas liquids rates that the prolific Marcellus Shale in Pennsylvania, the company said. The Ohio Department of Natural Resources estimates a recoverable Utica shale potential between 1.3 billion and 5.5 billion barrels of oil and between 3.8 trillion and 15.7 trillion cubic feet of natural gas, the company added.
BP has active shale positions in Woodford, Haynesville, Fayetteville and Eagle Ford.
-By Isabel Ordonez, Dow Jones Newswires; 713-547-9207;isabel.ordonez@ dowjones.com