Chesapeake: Ramping Up From Five Rigs Now To 40 Rigs by 2014 in the Utica -- Huge Story -- Competition With The Bakken for Dollars, Manpower, Equipment

I printed this earlier, but it was near the end of another post, and I'm not sure how many folks read to the end of some of my longer postings, so this is too important to be lost among the thousands of postings to date. 

The Utica is likely to be "bigger" than the Eagle Ford for Chesapeake, but the company needs a lot of cash to develop it.

Based on 2 years of proprietary petrophysical and engineering research, McClendon expects the Utica play “will be economically superior to the Eagle Ford shale” in South Texas for his company.

Chesapeake’s data on the Utica includes 2,000 well logs and petrophysical data on 200 wells.

Chesapeake has 1.25 million net leasehold acres in the Ohio Utica where it is running five operated rigs. The company expects to have eight Utica rigs by the end of 2011, 16-20 rigs by yearend 2012, and 40 rigs by yearend 2014. McClendon said Chesapeake has spent $1.5-2 billion on leases there and continues to acquire more acreage.

McClendon said Chesapeake is seeking a joint venture partner or other financial alternatives for its Utica operations. “Any solution will have upfront cash,” he said.

The story is important for (at least) two reasons.

Shovel-ready jobs; it's a pity the administration cannot embrace the energy resources of this country.

The Utica, along with the Niobrara, the Eagle Ford, the Haynesville, the Marcellus, will all compete with the Bakken for resources (dollars, skilled manpower, and equipment).

For investors only: for those folks worried about increased taxes on oil companies, one may want to think about HP. Just saying. I do not own shares in either CHK or HP.

I completely liquidated everything two days ago and bought gold.









Just kidding.