Shale plays stays focused in Guernsey

SALEM – The Ohio Department of Natural Resources issued nine horizontal drilling permits the week ending Aug. 9, all in Guernsey County.

There are 48 drilling rigs operating in the Utica/Point Pleasant shale play. To date 1,431 horizontal and permits have been issued and 1,004 wells drilled with 495 of those producing oil and gas products. Of the nine permits, Eclipse Resource had five, American Energy Utica three and Chesapeake Exploration had one.

The first horizontal drilling permit in Ohio was issued in 2010.

Activity in the northernmost part of the Utica shale area is driven by Midstream pipeline being laid to individual wellsites to connect to with main lines to production facilities.

Last week, a federal report said that natural gas production in Ohio’s Utica Shale region is growing rapidly, noting that in eastern Ohio it increased by more than 10 times over the last two years.

It jumped from 115 million cubic feet per day in 2012 to an estimated 1.3 billion cubic feet per day by September 2014.

The Utica play is one of the fastest growing natural gas production areas in the United States, according to the U.S. Energy Information Administration.

The report said Utica oil production has also increased to about 40,000 barrels per day but the numbers remain smaller than leading regions such as the Marcellus in Pennsylvania, the Bakken in North Dakota, or the Eagle Ford in Texas.

In another development, reported by the Associated Press, Royal Dutch Shell agreed to sell drilling rights in shale formations in Louisiana and Wyoming for $2.1 billion in two transactions.

In one of the deals, Shell will also receive drilling rights to land in Ohio and Pennsylvania.

Shell is working to focus its onshore U.S. drilling program on a few of the more prolific formations in an effort to boost profitability.

Shell will sell its Pinedale acreage in Wyoming to Ultra Petroleum for $925 million and 155,000 acres in the Utica and Marcellus shale formations in Ohio and Pennsylvania.

It will sell its Haynesville acreage in Louisiana to Vine Oil & Gas and the investment firm Blackstone for $1.2 billion.

Major oil and gas explorers regularly sell rights to fields where production is flat or declining and use that cash to fund exploration programs designed to discover new or more prolific fields that oil giants need to fuel growth.

The Marcellus shale in Pennsylvania has proven to be an extraordinarily prolific dry gas producer, and profitable for drillers because it produces gas at high rates per well.