The Utica - A Huge Story -- July 16, 2015

This is a huge story. A reader alerted me to the story yesterday. Now I see the full story that Rigzone is reporting:

The size of the Utica shale play’s technically recoverable resources is larger than previously thought, a recent study by West Virginia University (WVU) has found. WVU found that the Utica play contains technically recoverable resources of 782 trillion cubic feet (Tcf) of natural gas and around 1.9 billion barrels of oil. That’s higher than the U.S. Geological Survey’s (USGS) 2012 estimate of technically recoverable resources at 38 Tcf of gas and 940 million barrels of oil.

The study results indicate that the Utica – which spans West Virginia, Kentucky, Pennsylvania, Ohio and New York – is comparable to the Marcellus shale play in terms of size and potential recoverable resources. The Marcellus is the large U.S. shale play and second largest shale oil and gas play in the world. Most of the Utica play lies beneath the Marcellus. The interval between the Marcellus and deeper Utica plays ranges from 4,000 feet in Ohio to more than 6,500 feet in West Virginia. The drilling depth of the Utica ranges from less than 4,000 feet in Ohio to more than 12,000 feet in West Virginia, which is over two miles below the surface.

The results of the Utica Shale Play Book Study, a two-year geological study undertaken by the Appalachian Oil and Natural Gas Research Consortium, a program at WVU’s National Research Center for Coal and Energy, were presented at a July 14 workshop in Canonsburg, Penn. “The revised resource numbers are impressive, comparable to the numbers for the more established Marcellus shale play, and a little surprising based on our Utica estimates of just a year ago which were lower,” said Douglas Patchen, director of the consortium and well-known expert on the Appalachian Basin.

The resource estimates for the Utica went up significantly over the past year, partly due to the fact that researchers had more up-to-date information.

Researchers had twice the amount of data this time as they did last year, letting them do a better job of fitting curves for estimated ultimate recovery rates. The production from newer wells is doing much better than older wells, either because of improvements in technology or because producers are better at finding the sweet spots.

Hohn imagines that improvements are coming after oil and gas companies – who likely first tackled the Utica using petrophyiscal models from other shale reservoirs – eventually found the techniques that worked best for the Utica.

The technically recoverable resources are part of original gas-in-place estimates of approximately 3,192 Tcf and original oil-in-place of approximately 82,903 million barrels of oil. Hohn said that the researchers did not find the playwide oil recovery factor of around three percent and gas recovery factor of around 28 percent in sweet spot areas to be out-of-range or unusual, given the permeability and porosity of the play. A recovery rate range of 10 to 20 percent in the Appalachian region, even for conventional reservoirs, is not uncommon.

This reminds me of the early days of the Bakken when the USGS severely underestimated the size of the Bakken.

What peak natural gas?

Of course, the state of New York bans fracking so any natural gas from the Marcellus or Utica is technically not recoverable in that state. At least for the time being.