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PITTSBURGH — EQT Corp. reports that the initial wells the company drilled in eastern Ohio’s Utica shale determined that projected oil and gas recovery from the rock was “significantly below our expectations,” forcing the company to write off its Utica acreage to the tune of $162 million.
Most of the acreage is in Guernsey County, where other energy companies have developed successful wells and drilling programs, officials said during a conference call Thursday. The company also has leasehold postitions in Jefferson County.
EQT announced last year that it would halt its drilling program in the Ohio portion of Utica after initial wells there delivered poor results. The company planned to drill 21 wells there.
However, EQT is prepared to up its exploration efforts across the Utica in West Virginia and southwestern Pennsylvania. The company said it plans to test two Utica wells — one in Greene County, in Pa., and the other in Wetzel County, W. Va.
The company owns approximately 400,000 acres in the Utica between Ohio, West Virginia and Pennsylvania.
EQT also said it took a pretax impairment charge of $105 million on its Permian Basin acreage in Texas because of low oil prices.
Lower prices for oil and natural gas liquids have also caused the company to reduce exploration in the Marcellus shale this year in western Pennsylvania.
EQT plans to drill 122 wells in the Marcellus this year, down from the 196 it drilled in 2014. The company also expects to reduce the rig count from 15 to 12 in 2015.
The impairment charges led to EQT declaring a $14.7 million loss during the fourth quarter of 2014 versus income of $115 million during the same period in 2013. Earnings for the year stood at $387 million, or $2.54 per share, compared to 4390.6 million, or $2.57 per share, in 2013.
Copyright 2020 The Business Journal, Youngstown, Ohio.