Results of First Utica Gas Well Production

Mon Apr 2, 2012 5:01pm EDT

* State releases first results from Utica shale
    * Data gives hint of Utica potential
    * Some still have doubts

    By Edward McAllister and Selam Gebrekidan
    NEW YORK, April 2 (Reuters) - Five wells began producing oil
and gas with mixed results last year in Ohio's portion of the
newly developed Utica shale formation, offering the first
insight into a new frontier in U.S. drilling, according to state
figures released Monday.
    Results from the five wells drilled by Chesapeake Energy
 in Carroll and Harrison counties showed lower than
expected oil production, but fairly strong natural gas output,
the report said.
    "The reported volumes of oil are lower than estimated, but
higher than conventional wells," the report said, adding that
"gas production is significant, even with the early production
numbers."
    Chesapeake, the leading leaseholder in the Utica -- which
straddles eastern Ohio and western Pennsylvania -- has long
lauded its potential to match the prolificacy of other shale
plays like the Eagle Ford in Texas or the Marcellus in the
Northeast.
    Still, some analysts were disappointed by Monday's results
and remain skeptical of the Utica's potential until more data is
compiled.
    "While long-term trends in the play cannot be defined by
five initial well results, we believe today's data release
suggests ultimate production results out of the Utica have the
potential to disappoint," said Bernstein analysts in a note.
    Together, the wells, which operated for between 53 and 206
days in 2011, produced a total 43,513 barrels of oil and 2.5
billion cubic feet of natural gas, according to a report from
the Ohio Department of Natural Resources (ODNR).
    The most productive well, named Kenneth Buell in Harrison
County, "had 300 times more daily production than the average
vertical gas well in all of Ohio," said ODNR spokesman Carlo
LoParo.
    The Utica is expected to be the next major focus for oil and
gas production in the United States, whose energy outlook has
already been transformed over the past few years by the
development of shale deposits.
    Oil and gas producers have flocked to the region over the
past year, leasing land for exploration. Last week, London-based
BP announced it had reached an agreement to lease 84,000
acres in Trumbull county, Ohio, with a group representing
mineral owners in the county. Other majors like
ExxonMobil and France's Total have also leased
swathes of land there.
    Oklahoma-based Chesapeake is the Utica's largest
leaseholder. Of the seven wells now producing on the Ohio side
of the Utica, Chesapeake owns six and it has permits to drill 79
more -- far greater than any other driller operating there.
    Below is a table showing the five Ohio wells, production
rates and length of operation.	

 Owner       County    Well Name      Oil        Gas (mcf)  Days

 Chesapeake  Carroll   Calvin Mangun  12,334     322,435    206
 Energy                8H
 Chesapeake  Carroll   Bucey 3H       2,167      137,192    53
 Energy
 Chesapeake  Carroll   Harvey 3H      6,096      183,142    92
 Energy
 Chesapeake  Carroll   Neider 3H      9,444      395,290    130
 Energy
 Chesapeake  Harrison  Buell 8H       13,472     1,523,465  198
 Energy

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