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State oil, gas production rose in 2011, ODNR report says



Published: Wed, December 5, 2012 @ 12:00 a.m.

By Burton Speakman

bspeakman@vindy.com

YOUNGSTOWN

The Ohio Department of Natural Resources released its natural-resources report showing increases in oil and natural-gas production in 2011.

Its findings are well behind the expanding pace of the oil and gas industry.

During 2011, when the ODNR report was conducted, only one well was drilled in Columbiana County.

Since then, an additional 24 wells have been drilled in Columbiana, and two have been drilled in Mahoning County.

A total of 24 wells were drilled into the Utica Shale during 2011, according to ODNR, which is based in Columbus.

The most-recent figures show 165 wells have been drilled into the Utica, said Rhonda Reda, executive director of the Ohio Oil and Gas Education Program.

“Watching the number of permits can be kind of misleading because companies have to get permits for the vertical and then each horizontal well,” she said. “That means there could be three to seven permits for a single well.”

The rapidly expanding oil and gas industry makes it challenging for any type of production reporting to keep pace, said Eric Planey, vice president of international business attraction at the Youngstown/Warren Regional Chamber.

“I’m glad that ODNR is switching from an annual report to quarterly reports to take care of that issue,” he said. ODNR reports will be released quarterly starting in 2013.

Statewide, ODNR estimated that 460 wells were drilled in 2011, an increase of 33 wells from 2010. Mahoning was the only local county that appeared in the top counties for new wells in the 2011 report.

Of the wells drilled throughout the state, 338 were productive, and 27 were dry holes, according to the ODNR report.

Clinton-sandstone wells were the dominant form of drilling in 2011, but shale drilling during 2011 increased by 29 percent.

Clinton wells still will be more than 60 percent of the wells drilled in the state, Reda said.

“This is because they have a life cycle of 20 to 40 years,” she said. “Next year is going to be a historically low year in Ohio in terms of wells drilled.”

Prices to lease land have reached a point where companies cannot afford to drill vertical wells, Reda said.

“The cost of leasing the land is more than the cost to drill the well,” she said.

It was estimated the industry would invest $1.4 billion in Ohio by the end of 2012, but $3.1 billion has been invested thus far, Reda said.

Total crude-oil production increased by 1.4 percent to more than 4.8 million barrels in 2011, according to ODNR figures. Natural-gas production was up by 6.2 percent to more than 73 million mcf (thousand cubic feet). Both those figures are expected to increase this year.

Companies drilling in the Utica have the advantage of being able to extract three resources: natural gas, wet gas and oil, Reda said.


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