Utica Shale Moves Forward

By Eric Fox | April 24, 2012 AAA

The exploration and production industry is moving forward with the development of the Utica Shale in Ohio, with many operators counting on this promising new play to help grow production of crude oil and other liquids.

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Ohio Development
Most of the development of the Utica Shale has been in Ohio, where parts of the play produce crude oil and natural gas liquids. The Ohio Department of Natural Resources reported in its most recent update that it has issued 194 horizontal drilling permits for the Utica Shale through April 2012.

Operators
Anadarko Petroleum (NYSE:APC) is one of the operators active here and has received 10 Utica Shale drilling permits. The company has started drilling its fifth Utica Shale well and has put three of these wells into production. Anadarko Petroleum is encouraged enough by the results of these initial wells to continue its drilling program in Ohio.

Although the management of Chesapeake Energy (NYSE:CHK) is sometimes given to hyperbole when describing its achievements, it is safe to say that the company is the king of the Utica Shale. Chesapeake Energy has 900,000 net acres under lease here and has received the majority of well permits issued to date in Ohio.

SEE: Oil And Gas Industry Primer

Newbies
Many operators are just starting development of the Utica Shale. BP (NYSE:BP) recently reported leasing 84,000 acres in Trumbull County, Ohio. The company has not disclosed details of its expected development of this play for 2012.

Gulfport Energy (Nasdaq:GPOR) has 62,500 net acres prospective for the Utica Shale and plans to spend from $72 million to $76 million here in 2012 to drill 20 gross wells. The company just spud its first well into the Utica Shale and has obtained permits to drill five wells.

SEE: What Determines Oil Prices?

CONSOL Energy (NYSE:CNX) is involved with Hess Corporation (NYSE:HES) in an agreement to jointly develop the Utica Shale. The joint venture recently completed its first horizontal well here in Tuscarawas County and should release results on this well shortly.

Rex Energy (Nasdaq:REXX) just started drilling the company's first horizontal well into the Utica Shale in Ohio, after testing the dry gas area of the play in Pennsylvania in 2011. The company has 15,000 net acres under lease in Carroll County and expects to release results for the first Ohio well in August 2012.

SEE: A Guide To Investing In Oil Markets

The Bottom Line
The Utica Shale is frequently touted as one of the most promising crude oil and wet gas plays in the United States, and many exploration and production companies moved forward with development programs here in the first few months of 2012.

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At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.

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