The great thing about America’s shale oil and gas revolution is that new shale plays keep popping up from time to time.
Currently, the two hottest shale plays are arguably North Dakota’s Bakken and Texas’ Eagle Ford. These oil-rich formations are especially attractive because the price of oil is high, providing producers with a major incentive to keep drilling.
But there’s a downside to these plays. Because they’ve already proved their mettle and boast at least a few years of very impressive production history, land lease prices and production costs are sky high. That’s why energy companies continue to search for the next big resource play, hoping to establish a substantial acreage position while the land is cheap and competitors few and far between.
A case in point is the Utica, an emerging shale play that spans several states, though the majority of drilling activity so far has been focused in Ohio. Initial assessments suggest that the Utica’s resource potential could be on par with that of the Eagle Ford.
Based on encouraging initial test well results, several energy companies have expressed enthusiasm about the Utica’s prospects. Let’s look at three major ones.
Chesapeake Energy Corporation (CHK) (NYSE:CHK)
First up is Chesapeake Energy Corporation (CHK). After discovering the Utica in 2010, Chesapeake Energy Corporation (CHK) remains one of the most active operators in the play. As it stands, it is the largest leasehold owner, boasting approximately 1 million net acres. To date, it has drilled a total of 184 wells in the play, of which 45 are currently producing.
Chesapeake Energy Corporation (CHK)’s well results so far have been quite impressive, with several of its wells reporting daily production rates in excess of 350 bbls of oil per day. Two recent well completions in the company’s core drilling area in Carroll County, Ohio — the 8H Houyouse “15-13-5” and 8H White “17-13-5” — posted rates of 465 bbls and 390 bbls of crude oil per day, respectively.
Though the company was initially very bullish about the play’s oil potential, it has since scaled back its expectations. It even recently announced that it no longer views the Utica as central to meeting its oil production growth target for the year, though it remains optimistic about the play’s dry gas and gas liquids potential.
Going forward, it will be focusing its drilling efforts primarily in the wet gas window of the play inside of its joint venture with TOTAL S.A. (ADR) (NYSE:TOT), where it commands 450,000 net acres. Within this area, the company is projecting expected ultimate recoveries of five to 10 bcfe.