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Youngstown Vindicator...
ODNR to release shale-production figures Monday
By Karl Henkel  
April 1.  2012 

March Madness may be meandering to the finish in college basketball. 

But in Ohio, the madness has just begun, at least in the natural-gas and oil industry. 

By week’s end, all Utica Shale well drillers will report 2011 production figures to the Ohio Department of Natural Resources. 

The facts and figures will provide the first real glimpse at what lies 7,000 feet beneath the ground in Northeast Ohio. 

Front and center will be Oklahoma City-based Chesapeake Energy Corp., which operates all seven producing wells in the nation’s newest shale play. 

Figures for five of those wells will be available on the Ohio Department of Natural Resources’ website Monday, said Carlo LoParo, the agency’s communications officer. 

LoParo said production will be reported by total extracted energy. 

The number of days extraction took place also will be reported; the deduction can then be made as to average daily production rates. 

“You’re going to see some fabulous returns being produced out of these formations,” said Rhonda Reda, executive director of the Ohio Oil and Gas Energy Education Program. 

Until now, there are scarce public details regarding Utica Shale wells. 

Chesapeake in September released peak production rates for four of its Utica Shale wells, three in the Buckeye State. 

The wells — one in Harrison and two in Carroll counties — reported at least 1,530 equivalent barrels of wet gas and oil and at least 3.1 million cubic feet per day of natural gas. 

Those figures, however, were snapshots; peak numbers that do not represent the true production value of a well, said Jeffrey Dick, Youngstown State University geology department chairman. 

“When they issue a peak rate, what they’re giving you is the maximum flow they got during their test,” he said. “A peak rate is not a sustainable rate.” 

Steven C. Dixon, executive vice president of operations and geosciences and COO of Chesapeake, said in a fourth-quarter earnings call that two other wells, both in Carroll County’s Center Township “produced at peak 24-hour rates on average of 700 barrels and 3 million [mcf] per day.” 

Chesapeake does not have to report production figures for these two wells to ODNR by the end of the month because production began after the start of 2012. 

ODNR will require those production figures by March 31, 2013. 

Energy companies have thrown out assumptions as to oil-and-gas reserves in the Utica Shale, but they are unfounded, Dick said. 

“Everybody is grasping for the little bit of information that is out there,” he said, referencing past press releases of peak figures. “Nothing is a substitute for production.” 

ODNR previously had estimated the Utica Shale could produce between 2 million and 10 million cubic feet of gas daily, but in a recent report said “without actual production histories ... it is not possible to properly create a probable reserve estimate.” 

Both Dick and Reda acknowledged the sample size — just five wells — is quite small. 

Reda estimated that about 4,000 Utica Shale wells will be drilled by 2015; about 2,800 will be in production by that time. 

Monday’s reports will detail how much and where a bulk of the resources lies, Dick said. 

About three-quarters of all Utica Shale well permits are in Columbiana, Mahoning, Carroll, Jefferson and Harrison counties, the supposed hot zone for wet gases. 

Dick also urged that initial production figures won’t dictate the immediate success or failure of the shale. 

“I don’t know if you’ll be able to draw any conclusions for three, four, five years,” Dick said. 

Read this and other articles at the Youngstown Vindicator


 
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