Utica Shale production numbers show Ohio on the brink of a new gas and oil boom, state officials say.
The Department of Natural Resources released last year’s Utica production numbers during a televised “State of the Play” conference in Columbus.
“We believe the Utica Shale play in Ohio is the real deal, and that it has already brought unprecedented growth in oil and gas production, and it’s going to produce staggering amounts of oil and gas in the future” said ODNR Director James Zehringer.
Eleven drillers reported production from 87 Utica wells last year, but only two wells flowed for more than 300 days, and none for an entire year, according to the report.
Those wells churned out more than 600,000 barrels of oil and 12.8 billion cubic feet of natural gas. They also generated more than 600,000 barrels of wastewater, most of it from the hydraulic fracturing process, or fracking, in which pressurized water, sand and chemicals are used to crack the shale and free the oil and natural gas.
By comparison, in 2011, nine Utica wells, all drilled by Chesapeake Energy, produced 46,000 barrels of oil and about 2.6 billion cubic feet of gas.
“Although it’s still very early in the development of the Utica, this shows the enormous potential of this play,” Zehringer said.
Utica wells account for less than 1 percent of Ohio’s 51,000 producing wells, and are constrained by a lack of pipelines and processing facilities. Still, they generated 12 percent of the oil and 16 percent of the natural gas in the state last year, Zehringer said.
Put another way, one Utica well produced the same amount of oil as 312 conventional wells and as much natural gas as 448 conventional wells, he said.
With those numbers, Utica wells could surpass conventional oil and gas production as early as 2015.
“That’s a lot of homes heated, a lot of water warmed, a lot of gasoline refined for Ohio families,” Zehringer said.
Last year’s numbers met or surpassed ODNR’s projections for wells drilled and producing, and officials said they expect the trend to continue.
By year’s end, ODNR projects there will be 362 Utica Shale wells producing, and in 2015 that number could top 1,000, said Rick Simmers, chief of ODNR’s Division of Oil and Gas Resources.
Actual results will depend on the how much oil and natural gas is really beneath the surface, pipeline construction and trends in the energy market.
The oil flowing from the wells is very volatile, meaning it evaporates quickly and is not as thick as standard crude oil. Nor is it as valuable, bringing about 85 percent of the value of standard crude oil, Simmers said.
The state report doesn’t differentiate between “dry gas” — the methane burned as fuel — and more sought after “wet gas” that contains propane, butane and ethane, which are used to make plastics and synthetic rubber.
Page 2 of 2 - As of last week, ODNR listed 97 producing wells, with another 229 wells drilled or in the process of being drilled.
Carroll County has the most wells, with 50 producing, another 99 drilled and 108 permitted.
Chesapeake, which has concentrated on Carroll, Columbiana and Harrison counties, is the main driller in Ohio. The Oklahoma City-based company, which is building a regional headquarters in Louisville, has permits for 413 wells, with 63 already producing.
Gulfport Energy has the second-most permits, 50, with 6 wells producing. It is drilling in Harrison, Guernsey and Belmont counties.
There is also a drilling trend through Columbiana, Mahoning and southern Trumbull counties, “and that’s where a lot of the drilling may occur this year,” Simmers said.
Right now, drillers report production numbers once a year on March 31. Zehringer said ODNR wants state lawmakers to require quarterly reports, so that regulators can keep pace with shale drillers. He also touted Gov. John Kasich’s plan to increase the severance tax paid by drillers while cutting income tax.
Fracking is an environmentally controversial practice, and Zehringer said his department will follow science-based regulations that protect public health and the environments while not hindering economic growth.
That includes working with the state Environmental Protection Agency and the Ohio Department of Health to evaluate concerns about naturally occurring radioactive material brought to the surface by drilling.
No problems have been noted so far, Zehringer said, “but we want to be ready if there are.”
2012 PRODUCTION STATS
OIL: 635,896 barrels
NATURAL GAS: 12.8 billion cubic feet
WELLS: 87 (65 commercially producing, 19 tested and shut-in, three plugged)
CUMULATIVE WELL STATS
As of May 11
As of May 11