Chesapeake Energy Finding Promising Returns in Ohio River Valley

Last year, Chesapeake Energy released the results of its Buell 8H well in Archer Township, Harrison County, to much fanfare. The returns – a peak rate of 9.5 million cubic feet per day of natural gas and 1,425 barrels per day of natural gas liquids and oil (3,010 barrels of oil equivalent) per day – sent a strong signal across the region, and was an incarnation of the incredible potential our natural energy resources hold for future development.

Less than 50 miles down the road in West Virginia, Chesapeake is once again drawing attention with more promising wells coming online.

One of the company’s wells in Ohio County is showing very strong initial production results. The Mark Hickman 5H well has an initial test rate of about 1,195 barrels of oil equivalent per day (290 b/d oil, 305 b/d natural gas liquids, 3.6 mmcf/d).

Another well, just a short hop south into Marshall County, is returning 305 b/d of oil.

While it’s still early, the results bode well for West Virginia’s panhandle and it’s potential in housing liquids and oil. Combined with the company’s investments in other shale formations, including the $1.5 billion dedicated to develop Ohio’s Utica Shale, these production numbers offer encouragement to the company, and it’s future success in the region.

This notion was highlighted by Chesapeake executives in its recent earning report:

We continue to deliver on our liquids growth targets, led by a year-over-year increase of nearly 40,000 barrels per day in oil production. We achieved this despite the sale of nearly 18,000 barrels per day of oil production associated with our exit from the Permian Basin during the 2012 third and fourth quarters. We believe this performance ranks Chesapeake among the top three organic oil growth stories in the industry for 2012. – Steven C. Dixon, Chief Operating Officer (2/21/13)

Across the river in Ohio, the company seeks to expand on it’s success.

As the Akron Beacon Journal recently reported, Chesapeake is encouraged by its returns coming out of Ohio in 2012. The production levels of four wells that came on late in 2012 were highlighted in the call:

• The Cain well (Jefferson County): 1,540 barrels of oil equivalents per day (6.7 mcf natural gas and 425 b/d of natural gas liquids).

• The Walters well (Carroll County): 1,140 barrels of oil equivalents per day (3.6 mcf  natural gas per day, 315 b/d oil and 220 barrels NGL).

• The Houyouse well (Carroll County): 1,730 barrels of oil equivalents (5.4 mcf of natural gas per day, 525 b/d oil, 305 b/d NGL).

• The Coe well (Carroll County)  2,225 barrels of oil equivalents per day.

With development of the Utica/Point Pleasant and Marcellus formations in the Ohio River Valley continuing to expand, we can expect continued success in production in 2013.

I am very proud of what our team has accomplished thus far and look forward to driving further liquids production growth and capital efficiencies in 2013. – Steven C. Dixon, Chief Operating Officer (2/21/13)

As more infrastructure is put into place – such as the recently announced cracker plant in West Virginia – the region will experience an uptick not only in production numbers like these, but in investments and job creation in our communities as well.

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