Chesapeake Energy held their third quarter earnings call on November 2nd to discuss the company’s earnings, as well as provide an update for their Utica Shale holdings. Prior to the call, Chesapeake released production results coming from three wells recently brought into production in Harrison and Carroll Counties, all of which we quite promising.
Chesapeake is very excited about the potential of the Utica formation, and has focused attention to developing their acreage in eastern Ohio. The company currently has 13 operating rigs in Ohio, making it the second most active formation in which Chesapeake is currently active.
Through October, Chesapeake has developed 134 wells, with 32 in production and 37 additional wells waiting on pipeline connection. Another 65 wells are in various stages of completion. As infrastructure and midstream facilities are completed, Chesapeake forecasts a significant increase in production, and are very optimistic about its returns. This sentiment was echoed by the company’s CEO Aubrey McClendon on Friday morning’s conference call with analysts.
We’re thrilled with the Utica, It’s just taken a while to show results because we’re simply waiting on midstream build-out to occur. – Chesapeake CEO Aubrey McClendon (McClendon Says He’s ‘Thrilled’ with Utica Results, 11/02/12)
This week’s report on the results of the three wells brought into production are, again, very promising for both Chesapeake as a company and the Utica Shale as a viable energy resource, demonstrating strong production with a significant mix of natural gas liquids and oil.
The Houyouse 15-13-5 8H located in Harrison County produced 5.6 million mcf of natural gas per day while also producing 465 barrels of oil and 335 barrels of natural gas liquids equaling to 1,735 barrels of oil equivalent (BOE) per day.
The next well brought on line in Carroll County was the White 17-13-5 8H. The White well produced 4.1 million mcf of natural gas a day while also producing 390 barrels of oil and 285 barrels of natural gas liquids equaling to 1,360 BOE per day
The Stuart Henderson 11-12-6 1H is only the second well Chesapeake has put into production in Harrison County. Their first, the Buell Well, is one of the highest producing wells in the Utica to date. The Stuart Henderson produced 1.9 million mcf a day while also producing 410 barrels of oil a day and a 100 barrels of natural gas liquids a day equaling to 825 BOE per day.
All three wells are very encouraging as we continue to develop the Utica Shale, and McClendon notes the production numbers “are as good as any from any play” across the country.
Chesapeake’s continued activity in developing the Utica Shale has already brought significant investment to Ohio, a trend the company plans to continue. As midstream and pipeline infrastructure continues to be built out more wells will be put into production, providing Ohioans with a clearer picture of how significant the Utica Shale will be for the state.
According to Mr. McClendon, that picture will be much clearer – and brighter – in the coming year:
We expect much more meaningful contribution from the Utica in 2013. In the meantime, we’re continuing to drive down drilling cycle times and total well costs, as well as refine our completion techniques. We expect to see excellent returns in the Utica. – Chesapeake CEO Aubrey McClendon (McClendon Says He’s ‘Thrilled’ with Utica Results, 11/02/12)
With only 32 wells in production, Chesapeake plans to develop over 4,000 wells in the Utica Shale over the coming decades, signaling significant investment in the state and providing much needed revenue and jobs for Ohio.