Columbiana County Wells Encourage Chesapeake

YOUNGSTOWN, Ohio – Chesapeake Energy Corp. said it’s encouraged by impressive results from wells recently placed into production in Columbiana County, and is contemplating expanding its core position to include additional exploration there.

M. Christopher Doyle, executive vice president of Chesapeake’s Northern Division, told analysts and media during a conference call this week that early production results from three wells drilled in Columbiana County have proven much more lucrative compared to nine others in the area that were drilled earlier.

“Early well performance based on the first nine wells in this lean area outperformed our type curve,” Doyle said. “But, interestingly and remarkably, the recent wells have outpaced those tests by 50%.”

Doyle noted that Chesapeake has successfully targeted areas by using improved seismic and geologic data that has evolved over the five years the company has explored the Utica. Chesapeake is also drilling longer laterals in its horizontal wells.

Oklahoma City-based Chesapeake is the most active driller in the Utica with most of its assets concentrated in Carroll County, just south of Columbiana. Doyle says that based on the results of these new wells, the core of Chesapeake’s exploration could to expand into southern Columbiana County, where it holds a strong lease position.

Nevertheless, the company announced it would scale back drilling operations across the shale play because of depressed prices in the oil and gas market.

Doyle told analysts May 6 that Chesapeake intends to reduce the number of rigs it operates in the Utica from five to two. In addition, it expects to reduce the number of fracking crews from 4.5 to 2.5 by the middle of the third quarter of 2015. “That will closely approximate the level of activity needed to maintain our lease position,” he said.

The company announced it would also reduce activity in other shale plays, including the Marcellus in Pennsylvania and the Eagle Ford in Texas.

Chesapeake began production on 38 Utica wells during the first quarter, the company reported. The average peak production of those wells stood at 1,272 barrels of oil equivalent per day.

Net production of all Chesapeake’s Utica wells yielded roughly 100,000 barrels of oil per day during the first quarter, a 10% increase compared to the previous quarter.

In a related story, Rex Energy, based in State College, Pa., announced Wednesday that it would sell a chunk of its Ohio Utica shale assets and instead concentrate on developing its leasehold positions in western Pennsylvania.

Officials said during a conference call that Rex intends to sell its dry-gas positions in Belmont, Noble and Guernsey counties. It would continue to hold assets in Carroll County. The company holds approximately 21,000 acres in Ohio.

The company said it wants to concentrate on developing its positions in Butler and Lawrence counties in western Pennsylvania.

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