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The very first Utica-Point Pleasant (Utica Shale) well in Ohio was permitted in September 2010 amid anticipation of what the next few years would bring in terms of drilling, economic development, jobs creation and environmental risks.
The Marcellus Shale in neighboring Pennsylvania had proven to be the largest shale-gas play on Earth, so why not expect the same or even more from the Utica Shale here in Ohio?
As it turns out, a comparison between the Utica Shale in eastern Ohio and the Marcellus Shale in Pennsylvania makes sense. Both states have nearly parallel histories of oil and gas exploration and development dating back to 1859. The petroleum industry in both states had peaked years ago and was in a gradual and steady state of decline. The geology of the Marcellus and Utica Shales is not all that different as both formations were deposited in the same ancient sea that covered the region for most of the Paleozoic Era (about 280 million years ago).
Unconventional drilling of the Marcellus Shale was pioneered by Range Resources with its first well drilled in Washington County in 2005. Since that first well, Marcellus drilling activity in Pennsylvania grew steadily over the next six years. Marcellus Center for Outreach and Research (MCOR) data show that in 2007 the number of unconventional Marcellus wells drilled in the state stood at 112 wells. The number of wells grew to 333 in 2008, 815 in 2009, 1,614 in 2010 and peaked at 1,975 in 2011. In 2012, the number of wells began to decline.
The decline is attributed in large part to the demand for drilling rigs in the Utica Shale of Ohio. The total number of Marcellus wells drilled in Pennsylvania through 2012 stands at approximately 6,300.
Although there are many similarities between the Marcellus Shale of Pennsylvania and the Utica Shale of Ohio, the approach to exploration and production is very different. One of the greatest differences stems from the simple fact that operators in Ohio have the benefit of learning from mistakes made in Pennsylvania. Operators drilling in Ohio are keenly aware of the high value that Ohioans — like their Pennsylvania neighbors — place on the enduring natural resources of fertile soils, clean water and air, natural vegetation and wildlife. Environmental awareness coupled with strong state-controlled regulations has resulted in very few environmental problems.
In addition, the great economic success enjoyed by relatively small and few independent operators in Pennsylvania did not go unnoticed by major energy companies when it came to the Utica Shale. The operators that initiated Utica Shale exploration in Ohio included companies with large reserves and deep pockets, such as Chesapeake Exploration, Devon Energy, Anadarko E&P and Chevron Appalachia to name a few. These cash-rich companies were able to lease large amounts of acreage before conducting any exploration activities of their own.
The geographic distribution of drilling activities between Pennsylvania and Ohio is also very different. Marcellus Shale exploration and production has been largely restricted to two areas: the natural-gas liquids-rich portion of the play in Washington and Greene counties in the southwest and the comparatively thick but dry gas (methane) rich portion of the play in Tioga, Bradford and Susquehanna counties in the northeast. The Utica Shale is markedly different from the Marcellus in that it is characterized by well-defined zones of natural- gas liquids and dry gas that trend in a northeast to southwest orientation across the play from Trumbull County in the north to Noble County in the south. Because of the more predictable occurrence of natural-gas liquids and methane of the Utica Shale and the play’s overall smaller footprint, defining the boundaries of the production zones has required considerably fewer wells. Within the first three years of Utica exploration drilling activity, about 450 wells have been drilled. This is a sharp contrast to the more than 1,300 wells drilled within the exploration phase of the Marcellus.
The various operating companies working the Utica Shale (23 in all) demonstrate different approaches to exploration and production as evident in their leasing, permitting and drilling activities. Chesapeake received considerable attention early on for its large-scale and aggressive approach. Chesapeake currently has more than 1 million acres under lease with about 225 wells drilled and 77 wells actively producing. Chesapeake is concentrating on its natural- gas liquids-rich acreage in Carroll, Harrison, Jefferson and Columbiana counties. With a part of M3 Midstream’s Utica East Ohio processing plant up and operating, Chesapeake will be concentrating on establishing gathering-pipeline systems to existing well pads and drilling production wells within its core area.
Gulfport Energy Corp. has a decidedly different approach to exploration and production compared with Chesapeake. Gulfport currently holds about 145,000 acres in the southern portion of the Utica Play that includes leases in Belmont, Guernsey and Harrison counties. Gulfport carefully evaluated the geology of the Utica play before leasing acreage beginning in mid-2012. Its research indicated the greatest potential likely would be found in the southern part of the play where significantly less faulting activity may have preserved the integrity of the reservoir seal, and preventing natural-gas leakage and maintaining reservoir pressure over geologic time. Early indications suggest its research was spot-on as Gulfport is currently enjoying comparatively high rates of production driven by higher than normal formation pressure in the lower portion (Point Pleasant Formation) of the Utica Shale. Gulfport Energy partnered with MarkWest Utica in 2012 to construct and operate gas-gathering systems and processing facilities to bring its production to market.
With the midstream infrastructure in place, Gulfport is concentrating on developing its acreage and currently has 13 wells drilled, nine wells actively producing and four rigs actively drilling.
It is easy to draw parallels between Pennsylvania and Ohio when it comes to the Marcellus and Utica Shale gas plays. Although there are significant differences, both states share the distinction of being the proving grounds for best management practices in shale-gas development. As the shale-gas revolution continues to expand across North America and the world, the lessons learned in Pennsylvania and Ohio will provide lasting benefits in the form of environmental protection measures and efficient resource development practices around the world.