Tuesday, April 3, 2012

Chesapeake "Optimistic" About The Utica

This is about the Utica, not the Bakken, but somehow a couple of us got into a discussion about the merits of Chesapeake and the Utica vs Chesapeake and the Bakken.

Rigzone has an update with regard to Chesapeake and the company's "thoughts" about the Utica.

Some data points:
  • Recoverable oil in the Bakken, USGS: 3 - 4 billion bbls; CLR/CEO says as much as 24 billion
  • Recoverable oil in the Utica: 1.3 to 5.5 billion
  • Chesapeake: number of rigs in North Dakota -- 1 active one today, I believe (if I'm wrong, someone will tell me)
  • Chesapeake plans to have 20 rigs in Ohio by the end of the year (2012)
  • Currently, Chesapeake has five Utica shale wells (operated by subsidiary Chesapeake Appalachia): these five produced 45,513 bbls of oil and 2.5 million cubic feet of gas in 2011 (an "average" Bakken well should be able to produce 50,000 bbls in first six months; just a rule of thumb for me; others will have their own "rule of thumb")
I don't have a dog in this fight one way or the other. I just wish all good luck whatever their endeavors in the oil patch.

2 comments:

  1. CHK has reported on 7 producing Utica wells. 5 produced in 2011. I provided links to the Ohio DNR info in a comment yesterday.

    CHK, TOTAL, and EnerVest are very optimistic about the Utica. They have the real data.

    The Ohio gov't data is not very informative, as their commentary reveals. CHK has a motive to not tell competitors much. It hasn't. The data is intentionally uninformative, but totally accurate.

    Various completion techniques have been tried. Some worked well. Some not.

    Big sales or JVs may be from $15,000 (TOTAL's price) to $25,000 by fall, if EnerVest is right (they don't give a price). But, that is for the good stuff. There is a lot of fringe.

    Leasing is ongoing at up to $6,000 and 20% for the best land.

    CHKM estimates that total industry cost for midstream (pipes and processing) for the wet gas area only will be $10,000,000,000.

    Lots of good dry gas and lots of oil too. Little data on either.

    Very little talk about the Utica outside Ohio. But, it is huge, like the three forks. Much is dry gas.

    Lots of other layers, including Marcellus.

    Scroll for maps:

    http://phx.corporate-ir.net/phoenix.zhtml?c=101196&p=irol-presentations

    http://files.shareholder.com/downloads/EVEP/1237438893x0x550367/71a3217e-9205-4d45-b0d0-02df50ab2d77/Raymond%20James%20Institutional%20Investor%20Conference%20030712.pdf

    CHK totally dominates the play so far. Totally.

    Most players are big. CHK, Devon, Anadarko, XOM, BP, Shell, Carrizzo, EnerVest (legacy assets) ... Some local players. A few others.

    Utica is just part of a huge basin. It will be very big. Lots to come.

    It is much gassier than the WB. Some of the best gas plays in the world.

    anon 1

    ReplyDelete
    Replies
    1. Thank you for the data. In addition to posting this as a comment, I will start placing Utica data at a separate post. This data is too good to be "lost" in the comments. Thank you.

      Delete