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Krugliak, Wilkins, Griffiths & Dougherty Co., L.P.A. presents

Utica Journal Discoveries - An Electronic Oil and Gas Newsletter

With offices located in the heart of the Utica Shale play in

Canton, Akron, Alliance, New Philadelphia & Sugarcreek, Ohio

                                       Editors Gregory W. Watts, Esq. and Ryan W. Reaves, Esq.

 

 

Chesapeake Energy Corporation Reports Financial and Operational Results for the 2014 Third Quarter
Chesapeake Energy Corporation
Chesapeake Energy Corporation (NYSE: CHK) reported financial and operational results for the 2014 third quarter.  CHK reported its Utica net production averaged approximately 85.5 mboe per day (154.4 gross operated mboe per day) during the 2014 third quarter, an increase of 27% sequentially.  Chesapeake anticipates incremental compression capacity of 150 mmcfe per day gross on the Cardinal pipeline in the 2014 fourth quarter.  The company continues to improve its capital efficiencies within the Utica.  Average completed well costs (as measured from January through July) are approximately $6.5 million with an average completed lateral length of 6,300 feet and 32 frac stages, compared to an average of $6.7 million in 2013 with an average completed lateral length of 5,150 feet and 17 frac stages.  The average of completed well costs is already significantly below the year-end 2014 target of $7.1 million per well despite incurring additional capital reinvestment in completions.  Wells in various stages of completion or waiting on pipeline in the area decreased to 172 as of September 30, 2014, compared to 195 at December 31, 2013.  The average peak production rate of the 77 wells that commenced first production in the Utica during the 2014 third quarter was approximately 1,175 boe per day.  A copy of the accompanying presentation may be viewed here.

 

Gulfport Energy Corporation Reports Third Quarter 2014 Results

Gulfport Energy Corporation
Gulfport Energy Corporation (Nasdaq: GPOR) reported financial and operational results for the third quarter of 2014 and provided an update on its 2014 activities.  In the Utica Shale, Gulfport spud 31 gross (26.4 net) wells during the third quarter of 2014.  In addition, Gulfport brought online 19 wells, all located within the wet gas window of the play.  At present, Gulfport has eight horizontal rigs drilling in the play.  Since August 2014, Gulfport has increased its acreage position in the play, adding approximately 500 net acres, bringing the Company's total acreage position to approximately 185,000 gross (184,000 net) acres under lease in the Utica Shale.  A copy of the accompanying presentation may be viewed here

 

Utica shale play running out of room to expand, Gulfport Energy says

Columbus Business First
Gulfport is pleased with what it has, but seeks to add some more core acreage in eastern Ohio.  It has enough inventory to support years of drilling, its chief executive says.  "But availability of unleased acreage is scarce," CEO Michael Moore told securities analysts in a Thursday conference call.  Moore said the company will spend "significantly less capital on new leaseholds as compared to 2014."  The company won't release its guidance for 2015 until the new year begins.  A transcript of the full call may be viewed here

 

Antero Resources Reports Third Quarter 2014 Financial Results
Antero Resources         
Antero Resources Corporation (NYSE: AR) released its third quarter 2014 financial results.  Since the second quarter 2014 operations update release, Antero has increased its Utica acreage position by 15,000 net acres resulting in 134,000 total net acres in the core of the Utica Shale play.  Included in the net acreage additions is a recently closed acquisition with an undisclosed third-party for a consolidated 12,000 net acre position in the rich gas core totaling $185 million.  Pro forma for these net acreage additions, approximately 10% of Antero's total net acreage was associated with proved locations and approximately 4% with proved developed locations at mid-year 2014.  Approximately 76% of the Utica total net acreage, or 102,000 net acres, is believed to contain processable rich gas assuming an 1100 Btu cutoff.

 

Rex Energy Reports Third Quarter 2014 Operational and Financial Results

Rex Energy
Rex Energy Corporation (Nasdaq: REXX) announced its third quarter 2014 operational and financial results.   In the Warrior North Prospect [Carroll County, Ohio], the company placed nine gross (9.0 net) wells into service in the third quarter of 2014.  As previously announced, the company placed into sales the six-well Grunder pad and the three-well Jenkins pad.  The six-well Grunder pad produced at an average 5-day sales rate per well of approximately 1.2 Mboe/d on a 18/64" choke and went on to produce at an average 30-day sales rate per well of approximately 0.9 Mboe/d, comprised of 1.6 MMcf/d of natural gas, 288 bbls/d of condensate and 331 bbls/d of NGLs (assuming ethane recovery), on a 17/64" choke.  The three-well Jenkins pad produced at an average 5-day sales rate per well of approximately 1.6 Mboe/d on a 18/64" choke and went on to produce at an average 30-day sales rate per well of approximately 1.3 Mboe/d, comprised of 2.3 MMcf/d of natural gas, 484 bbls/d of condensate and 463 bbls/d of NGLs (assuming ethane recovery), on a 16/64" choke.  Of particular note, the company has continued to conservatively manage the choke size of the six-well Grunder pad and three-well Jenkins pad under a restricted choke program to maximize liquids production.  In the Warrior South Prospect [Guernsey, Noble and Belmont Counties, Ohio], the company has finished drilling operations on the six-well J. Hall pad, located in Guernsey County, OH.  The six wells were drilled with an average lateral length of approximately 5,400 feet and are testing 650 foot spacing between the laterals on the pad. The six wells are currently undergoing completion operations and are expected to be placed into sales near the end of 2014.

 

Carrizo Oil & Gas, Inc. Announces Third Quarter 2014 and Raises 2014 Results 
Carrizo
Carrizo Oil & Gas, Inc. (Nasdaq: CRZO) announced the Company's financial results for the third quarter of 2014 and provided an operational update.  In the Utica Shale, Carrizo had negligible condensate production during the quarter as its first well in the play, the Rector 1H in Guernsey County, Ohio, has been shut-in since the second quarter.  Carrizo expects to bring the Rector 1H back online in 2015 once infrastructure is in place.  Carrizo received the larger rig for its Utica Shale program late in the third quarter, and it is currently drilling the second well of its 2014 drilling program, the Wagler 2H in northern Guernsey County.  Carrizo is the operator of the Wagler 2H well, and holds a 67% working interest in it. In addition to the larger rig, Carrizo is also running one spudder rig in the play.  This should allow the Company to drill 5 gross (4 net) operated Utica Shale wells this year.  The Company recently began completion operations at its second operated well in the Utica Shale, the Brown 1H in northern Guernsey County.  The well was drilled with an effective lateral of 6,254 ft., and is expected to be completed with 26 stages. Carrizo plans to rest the well for approximately 60 days before commencing flowback operations. Carrizo is the operator of the Brown 1H well, and holds a 50% working interest in it.  Carrizo continues to expand its position in the condensate window of the Utica Shale play through bolt-on acquisitions.  The Company's acreage position in the play now stands at approximately 27,300 net acres.  The additional bolt-on acreage is located primarily in Guernsey County.

  

Working gas in underground storage, lower 48 states up 91 Bcf

U.S. Energy Information Administration

The U.S. Energy Information Administration reports gas storage is up 91 Bcf from October 31, 2014; but is 6.2 Bcf lower than that in storage on October 31, 2013, and 6.8 Bcf lower than the 5-year average from 2009-2013. 

 

PDC Energy Announces 2014 Third Quarter Results and Production Growth of 60% From Continuing Operations
PDC Energy
PDC Energy, Inc. (Nasdaq: PDCE) reported its 2014 third quarter financial and operating results.  The Company added a second drilling rig to its Utica Shale development operations in July and spud three horizontal wells in the Utica Shale during the third quarter.  PDC continued to delineate its southern Utica acreage as the Palmer 2-well pad was turned in line early in September.  The wells are on restricted chokes and production is in-line with expectations and supportive of the Company's condensate window.  The Company expects to turn in line approximately 45 Wattenberg and Utica operated wells in the fourth quarter of 2014. 

 

Eclipse Resources Corporation Reports Third Quarter 2014 Production

Eclipse Resources Corporation
Eclipse Resources Corporation (NYSE: ECR) announced third quarter 2014 production averaged 85.8 MMcfe per day which exceeded the high-end of the Company's previously issued guidance for the quarter and represents an approximate 104% increase from Eclipse Resources' second quarter 2014 production.  During the quarter, the Eclipse Resources turned 13 gross operated Utica Shale wells to sales.  In addition to the previously announced 2 well Shroyer Unit and 5 well Mizer Unit, the Company also brought the 5 well Mizer Farms Unit online, which is directly adjacent to the Mizer Unit in the Company's Condensate type curve area, and the Duane Weisend 4H well on the eastern boundary of the Company's Rich Gas type curve area.  To date, Eclipse Resources has now completed and turned in line 17 gross Utica Shale wells.  In addition, the Company currently has 10 gross operated wells drilling, 17 gross operated wells drilled and awaiting completion or completing, and 14 gross operated wells completed and awaiting turn to sales.  Benjamin W. Hulburt, Chairman, President and Chief Executive Officer, commented,  "The initial results from our Shroyer, Mizer and Mizer Farms wells appear consistent with our type curve expectations.  Our Duane Weisand well is flowing at a strong gas rate and has maintained strong pressures since being put online, with slightly lower BTU content than expected.  We continue to aggressively develop our outstanding asset base and are pleased to be focusing our development efforts in the more liquids heavy portions of the Utica play."
  

Hilcorp receives 11 new permits in Northern Utica

Shale Gas Reporter

Hilcorp Energy Co. is once again focused on the Northern tier of the Utica Shale.  In Columbiana County, Ohio, Hilcorp will drill three new horizontal wells.  In Pennsylvania, four well permits were approved in Lawrence County, and four were approved for Mercer County.

 

Hamm Still Optimistic About Oil Prices
Ok Energy Today
What Continental Resources Founder Harold Hamm says about the falling oil prices and why he's still optimistic:  "I see prices improving," he told a third quarter earnings report last week in Oklahoma City. "I see prices improving to the 85-90 dollar range."

 

Marcellus Drilling Increasing in Ohio

Shale Mart
The way Shawn Bennett sees it, oil and natural gas producers working in Eastern Ohio have a great economic opportunity to drill into both the Utica and Marcellus shale formations via the same pad.  "It can be very economical because you can drill Utica wells for dry gas and Marcellus wells for wet gas on the same pad," said Bennett, senior vice president of the Ohio Oil & Gas Association.  "And more wells mean for royalties," he added.  According to the Ohio Department of Natural Resources, producers have drilled 44 Marcellus wells in Belmont, Monroe, Jefferson and Columbiana counties.  "The Marcellus starts thin out once you get into Ohio," Bennett said. "But even though it thins out, it is wet gas, so that makes it more valuable."

  

EIA November 2014 Drilling Productivity Report

U.S. Energy Information Administration

The U.S. Energy Information Administration released today the November 2014 Drilling Productivity Report, detailing an increase in Utica Shale productivity by 7 mb/day of oil production and 89 mmcf/day of natural gas production as compared to the productivity reported in October 2014. 

 

Ohio's Rig Count Decreases by 1 for the Week for a New Total of 41 Rigs

Baker Hughes
The rotary rig count tracked by Baker Hughes reports a decrease this week in the number of rigs in Ohio developing the Utica and Marcellus Shale formation by 1 for a total of 41 rigs.  The full rig count report may be viewed here.