Profits up for two Utica operators

By Jamison Cocklin


The first quarter was a strong one for two of the Utica Shale play’s operators, with Halcon Resources reporting that its operations are well underway here and Chesapeake Energy raising its production targets.

Chesapeake reported Thursday a first-quarter net income of $15 million available to common shareholders, or 2 cents per fully diluted share. Minus losses and other one-time items, Chesapeake reported a profit of 30 cents per share.

Chesapeake is the nation’s second-largest gas producer behind Exxon Mobil and the country’s largest shale leaseholder. At the same time last year, the company reported a loss of $71 million, when it was hurt by a glut in natural-gas supplies and a corresponding drop in prices.

It had resorted to asset sales to bolster its bottom line, $2 billion of which were either signed or closed as of Thursday, Chesapeake reported. Revenue at the company surged by 42 percent year-over-year, finishing at $3.42 billion at the end of the first quarter.

Total production increased by 9 percent from the same time last year. The company said 63 percent of its capital expenditures will go toward well completions in Texas’ Eagle Ford shale formation and Oklahoma’s Greater Andarko Basin, while 11 percent will be dedicated to the Utica.

Chesapeake reported that it has drilled 249 Utica wells, with many awaiting pipelines and processing facilities. Net production across the company’s Utica assets was 66 million cubic feet of gas equivalent per day during the first quarter, with a year-end production target of 330 million cubic feet of gas equivalent per day in the Utica on track.

Wells in Carroll and Harrison counties were among Chesapeake’s top-producing Utica wells.

Also Thursday, Halcon, with operations in Mahoning and Trumbull counties and others getting underway in Pennsylvania, reported a profit of $17.5 million, or 5 cents per diluted share in the first quarter.

At the same time last year, the company reported a net loss of $2.7 million, or 4 cents per share.

Revenue at Halcon during the first quarter increased to $190.7 million.

Net production for the period increased to an average of 26,022 barrels of oil equivalent per day, with a mix consisting of 82 percent oil, 5 percent natural-gas liquids and 13 percent natural gas.

The company averaged two operated rigs in the Utica during the first quarter, started drilling on four wells and completed another four in Ohio and Pennsylvania. The company continues to explore the boundaries of its assets in the Utica— a process called delineation — expected to be complete sometime by the end of the year.

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