Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Chesapeake Energy Corporation (CHK), Gulfport Energy Corporation (GPOR), Magnum Hunter Resources Corp (MHR): Data That Every Utica Shale Investor Needs to Know About

The Utica shale may not ring any bells for the average investor. But, utter that name around energy industry professionals, and you’re sure to rouse a lively debate.

Chesapeake Energy (CHK)

An up-and-coming shale oil and gas play, the Utica stretches across Ohio, New York, Pennsylvania, Virginia, and West Virginia, though drilling to date has centered primarily in Ohio. Due to some major similarities with Texas’ highly productive Eagle Ford play, energy companies are buzzing about the play.

Unfortunately, however, relatively very little is known about the Utica’s true potential due to Ohio’s lack of transparency in reporting production data. But, for those who have invested in companies with major operations in the Utica, especially those more leveraged to the play like Gulfport Energy Corporation (NASDAQ:GPOR), Rex Energy Corporation (NASDAQ:REXX), and Magnum Hunter Resources Corp (NYSE:MHR), new, soon-to-be-released data should provide a much better glimpse into the play’s potential.

Next month, the state of Ohio will publish a comprehensive report detailing the Utica’s well results for 2012. These results are sure to have major repercussions for the handful of companies that have plowed millions of dollars into the play.

Let’s take a closer look at why Ohio has been so secretive, the specifics of the data it will soon reveal, and implications for some of the Utica’s major drillers.

Limited production data and regulatory constraints
Currently, Ohio state regulators request Utica operators to disclose production statistics only on an annual basis, whereas virtually every other state in the country publicly discloses production statistics and drilling data on a quarterly basis.

Moreover, major drillers in the Utica have only disclosed information about half of their producing wells in the Utica, according to an analysis by Reuters. In addition, much of the data is limited, and drillers aren’t required by law to release results on a per-well basis.

As Reuters highlighted, lawmakers last year were pushing to include a clause within a new energy bill that would have required Utica producers operating in Ohio to publicly release energy production statistics on a quarterly basis.

But, following discussions with oil and gas industry executives, lawmakers rejected the inclusion of the clause. In fact, the new law actually prevented Ohio’s government from releasing the quarterly production data it obtains from Utica producers operating in the state.

Crucial data to watch
At any rate, the time is upon us for that annual data to finally be publicly disclosed. The Ohio Department of Natural Resources (DNR) announced that it will be publishing a comprehensive report next month that will include new data from Ohio’s oil and gas wells.

Producers operating in the Ohio Utica are required to submit production data to the department on March 31, information which it will subsequently make available on its website in April. Though the department did not provide a specific date, it published the data last year on April 2.

The information provided will include only those wells that produced hydrocarbons in 2012, which equates to roughly between 50 and 60 wells. That’s a lot more data than last year, when the DNR published production data from only five wells.

Interestingly, that sparse collection of data is the only information officially disclosed by the state since drilling began in 2011, though several producers have provided production data for individual test wells.

That just goes to show you how important the new information will be; its release is sure to be closely watched by traders, investors, and the industry at large. Specifically, the new report will include data on output over the lifetime of each well, as well as other important information such as the well’s location and operator.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.