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Drilling prospects pick up in NE Ohio
youngstown
Oil and gas drilling in the northern portion of the Utica Shale play is slowly gaining momentum as more production companies continue to take out permits and finish delineating, or exploring, their acreage in Trumbull and Mahoning counties.
In its latest weekly report, the Ohio Department of Natural Resources said Wednesday that 841 wells have been permitted, 502 wells have been drilled and 125 of those are producing. Since oil and gas companies started to arrive about four years ago to begin leasing land for horizontal hydraulic fracturing in the state, areas south of the Valley were at the center of their attention. In Carroll County alone, operators hold 318 permits.
But in the last year, or so, a handful of exploration and production companies have trained their sights on the northern portion of the play, in Trumbull County, and even more so in Mahoning County.
“The reason this makes sense is Mahoning and Trumbull have simply been waiting for this activity to take place,” said Thomas Stewart, executive vice president of the Ohio Oil and Gas Association. “Shale production has been concentrated to the south from Carroll all the way down to Noble County. A big part of this is logistics and, of course, BP is a big landowner up there and it just takes a while for a company of that size to get geared up.”
A major processing facility in New Middletown expected to be operational by year’s end and a few key pipelines that will come into service within the next year or two will give exploration and production companies more incentive to drill in Portage, Stark, Mahoning and Trumbull counties, sources say.
In 2011, six permits were issued in Mahoning County with the first going to Chesapeake Energy. The number went up in 2012 to nine permits, and this year, 12 permits were issued, bringing the total to 27, according to the ODNR.
Eight wells have thus far been drilled in Mahoning County with no operators reporting a producing well here, but some dry gas has been put into sales with regional utility companies.
Much of Mahoning County’s activity has occurred in Poland Township, where 12 permits have been issued and a well is being drilled by Hilcorp Energy Co. And much of Poland’s activity is taking place at the Carbon Limestone Landfill — a 2,200-acre site owned by the waste management company Republic Services. Hilcorp has built two drilling pads there and has six permits for each pad. Those will be multiple completion pads from which multiple wells will be drilled. Just as in other areas of the play, Mahoning and Trumbull counties are at an area where the Marcellus and Utica shale formations overlap, giving producers more targets, Stewart said.
NiSource Midstream Services has partnered with Hilcorp to collect and process the gas it produces in Poland at the Pennant Midstream processing facility currently under construction.
NiSource officials recently told The Vindicator that they anticipate drilling in the northern portion of the Utica and other parts of the play will continue to pick up. As a result, they hope to serve other producers at the facility in the future.
Poland Mayor Tim Sicafuse said that from the village’s standpoint, there remains limited concerns about continued operations there, which he believes will only continue to grow.
In Trumbull County, 11 permits have been issued, with six belonging to BP, which leased 85,000 acres there last year. According to ODNR, BP has drilled just one of those wells and is currently drilling four others.
Earlier this month, Halcon Resources Corp. reported some of the best test results yet seen in the northern portion of the play where its Kibler 1H well in Lordstown stoked excitement about what’s ahead and led many to believe the company will go forth with plans to drill a second well there.
In its second-quarter earnings report, Halcon said it “has significant holdings in Trumbull and Mahoning counties and believes there is potential to drill hundreds of wells on its acreage in the area over time.”
Still, energy analysts who track exploration and production companies for investment banks across the country have repeatedly said they will need to see more production results from the northern Utica before they begin to look more favorably on operations in this part of the state.
Stewart said it will take time for operators to truly develop the northern Utica, but he called it a “very, very fresh area” that holds potential for production companies and said operations here will only keep growing.