Hilcorp Awarded 11 New Well Permits in Columbiana County

YOUNGSTOWN, OHIO – Hilcorp Energy Co., the Houston-based oil and gas exploration-company that was an early producer in the Utica-Point Pleasant shale formation in Ohio, has its eyes on what could be a “sweet spot” in Columbiana County.

The Ohio Department of Natural Resources has approved permits for the company to drill 11 new horizontal wells at its Baker pad in Elk Run Township, according to records.

These wells would accompany two producing wells at the location, records show.  

According to ODNR’s latest production data, those two wells – the Baker 6H and 14H – produced a total of 839 million cubic feet of natural gas during the second quarter of 2020. The 6H well logged 408 million cubic feet of natural gas while the 14H produced 431 million cubic feet, well above the average output for non-conventional wells across the state of about 270 million cubic feet, records show.

The wells produced zero barrels of oil during the quarter, according to data.

While these production numbers pale in comparison to big wells drilled in southeastern Ohio – a single well drilled in Belmont County by Ascent Resources, for example, yielded more than 3.1 billion cubic feet of gas during the second quarter – they are currently among the most productive found in the northern tier of the Utica-Point Pleasant formation, data show.

Elk Run Township appears to have emerged as a hot spot for strong wells in this part of the formation, according to ODNR records. Of the 10 wells drilled by Hilcorp in Elk Run, for example, two produced results that were just below average.  

Also, EAP Ohio LLC, an affiliate of Encino Energy Partners, boasted two strong wells in Columbiana County during the quarter at its Sevak pad in Washington Township. The Sevak 210H well yielded the most natural gas of all the county’s wells with 655.8 million cubic feet during the second quarter, while its Sevak 10H produced the second-highest volume with 516.3 million cubic feet. 

In 2018, EAP acquired all of bankrupt Chesapeake Energy Corp.’s Utica assets. Ten years ago, Chesapeake led the charge in the Utica, but heavy debt, underperforming wells and a collapse in natural gas prices placed an undue burden on the company and forced it into bankruptcy this year.

And just last week, Gulfport Energy Corp., another prominent exploration and production company in the Utica, filed for protection under Chapter 11, citing that its “large legacy debt burden” and transportation commitments “created a balance sheet and cost structure that was unsustainable in the current market environment.”

Faced with lower commodity prices brought on in part by the pandemic, natural gas and oil production is expected to decrease in the Appalachian basin in December compared to this month, according to the U.S. Energy Information Administration. 

Natural gas output in the Appalachia region – which includes the Utica shale formation in Ohio and Marcellus shale in Pennsylvania – is projected to decline by 133 million cubic feet per day, according to the EIA’s monthly drilling productivity report. Appalachian wells are on target to produce 33.637 million cubic feet of gas in December compared to 33.770 million in November.

According to EIA, all seven shale plays monitored by the agency are projected to reduce natural gas production in December.

Oil production is expected to drop in December by 1,000 barrels per day in Appalachia, EIA reported, while five other shale regions are expected to report a decrease in oil production for the month.  

The Haynesville shale region in eastern Texas and northwestern Louisiana is projected to report no change in oil output in December, EIA reported.

Copyright 2021 The Business Journal, Youngstown, Ohio.