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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.
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and other articles at the Youngstown Vindicator
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