The Utica Shale continues to make headlines, with its third milestone moment coming last week when the Ohio Department of Natural Resources (ODNR) released data showing that more than 1,000 horizontal wells have been drilled in the formation.
That rounds out a hallmark stretch that’s come over the last eight months. As of Aug. 9, operators had drilled 1,004 Utica wells and 495 of those were producing, according to ODNR. Last November, the agency issued its 1,000th horizontal permit (see Shale Daily, Dec. 6, 2013), in what sources said at the time represented the oil and gas industry’s early satisfaction with the play.
In July, ODNR said combined unconventional and conventional natural gas production in Ohio nearly doubled, from 86 Bcf in 2012 to 171 Bcf last year (see Shale Daily, July 2). The increase was driven mainly by high-volume horizontal fracturing (fracking) from 352 Utica and Marcellus Shale wells, which accounted for 100 Bcf of the 2013 total.
Ohio issued its first horizontal drilling permit in 2010. By 2011, Chesapeake Energy Corp. had drilled a series of the state’s first horizontal wells and it wasn’t until 2012 when operators brought the first commercially producing Utica wells online in the state.
Earlier this month, the U.S. Energy Information Administration (EIA) said it could no longer ignore the rapid rate of growth in the Utica, and would add the formation to its drilling productivity report (see Shale Daily, Aug. 1), which tracks oil and gas production in the nation’s leading fields. Monday’s report by the EIA estimates natural gas production in the play will grow by 78 MMcf/d from August-September, with monthly production exceeding 1.3 Bcf/d (see Shale Daily, Aug. 12).
Although Ohio operators are mostly focused on the Utica, ODNR data also shows that 44 horizontal Marcellus permits have been issued and 27 wells have been drilled in the state.
Nony on Fri, 15th Aug 2014 3:35 am
Pretty cool how the Utica is turning on, now.
Seems to put Berman’s 2009ish comments about shale gas being a bubble to being wrong. How are we continuing to increase production and at such a low price? He really had very little factbase (decline curves from Haynesville, handwaving about costs) to base a general statement on shale gas long term success.
Makes you wonder why anyone would pay any attention to Berman when he’s pessimistic about NY Marcellus. After all this guy sure missed the ball on how well the Marcellus did outside PA.
Davy on Fri, 15th Aug 2014 6:25 am
NOO, the gas bubble is part of the bigger bubble on Wall Street created by the Fed. If Wall Street’s/Fed’s Ponzi scheme is brought to tear, which always eventually happens, your gas bubble will be popped. The number do not add up. Your shale gas industry is too energy intensive and capital intensive to have a future beyond the Wall Street/Fed Ponzi scheme. It is great for now. We have a stronger country now because of this gas bubble. We have delayed the inevitable but the inevitable is still the end of BAU. The best thing that could happen soon is a BAU shattering crisis to call into questions all the attitudes and lifestyles in our culture that are not sustainable post abundant FF. This includes the questionable business practices as well as the population activities. Business too must go through radical changes. Those industries which are uneconomic or not vital to our post BAU survival must be dismantled. Your shale gas industry is one of those industries. Gas is important and we must not go cold turkey with gas but we have to wind down those shale gas operations that are not producing a positive real energy production. I am no expert but from the many posts and comments here I feel a significant portion of the shale gas revolution is not a net positive energy source. Society will not have the energy to support these efforts. Society will have to husband high quality energy for survival. So, in effect NOO, you are a shale gas ideologue cornucopian with misplaced optimism blindly promoting a resource which is putting us at risk of further descent pressures. We cannot distort our energy markets with uneconomic production made to look economic by the Wall Street/Fed Ponzi scheme.
rockman on Fri, 15th Aug 2014 7:35 am
From http://bismarcktribune.com/bakken/breakout/is-the-utica-shale-another-bakken-in-the-making/article_0a3fc124-f181-11e3-af0e-001a4bcf887a.html
“By the end of April 2014, more than 1,200 horizontal drilling permits were issued in Ohio targeting the Utica shale. Of the 829 wells drilled into the formation, 389 are now in production. Nearly all are in the state’s extreme northeast counties. At 2013 year’s end, Ohio’s Utica play was producing an average of 16,700 barrels of oil and 470 million cubic feet of natural gas per day.”
The math: the average Utica well is currently doing 42 bopd and 1,200 mcfpd. A reminder – an mcf is currently selling for $4 these days. That’s only about 4X times the rate of a stripper well. Of course since many of these wells are new the haven’t yet gone thru the high initial decline rate typical of the shales. So no I wouldn’t describe the Utica play as a bubble. It’s more like a popcorn fart. LOL