Interesting research on Utica/Point Pleasant

http://www.itg.com/wp-content/themes/itg-decode/energy-2013/19-Manu...

This outfit, ITG, put together an interesting analysis of the Utica/Pt Pleasant in Ohio. I find the porosity analysis quite revealing, the best performing areas have the highest porosity. The northern utica has much less porosity, answering the question as to what is causing it to underperform. Based on my daily reading of the Utica (I need a better hobby), I now believe the two most meaningful factors are the depth to formation and porosity. Thickness of the shale and total carbon are just as high in the north, but the wells are not producing like the southern ones. This study shows Belmont, Guernsey & Monroe as higher porosity areas and the depth to formation is approximately 2,000 feet deeper than the north. 

Anyone have other observations as to what is the determining success factors?

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Permalink Reply by Joseph-Ohio on July 2, 2014 at 11:19pm

IMHO, in reply to Dexter Green's last reply I only reiterate the 'captive market' practical / real world economic scenario.

Everything goes up in price always and especially indespensible commodities like hydrocarbon fuels and electricity. 

Prices are whatever the market will bear.

Can't do without them so it's a seller's market and I think it will be forever.

If overhead rises so will sell cost.

What can buyer's do ?  Boycott hydrocarbon fuel and electricity ?  I don't think that at all realistic.

The price for them will rise and consumers will pay and the affects will ripple up the economic ladder as inflation.

Permalink Reply by Dexter Green on July 2, 2014 at 11:57pm

Joseph,

The inconsistency in your thesis is the notion that prices rise not only constantly but with some measurable consistency.  During the recession nat gas prices plummeted.  But drilling didn't stop.  Companies were drilling because they simply had to per JV agreements, expiring contracts, etc.  The glut of supply and the lessening demand made prices drop to the point where there was no shale gas field in this country that was economical.  The consumer won, the E&P companies lost. Despite being captives in the marketplace we still were able to enjoy the benefits of a massive and entirely self-created oversupply.  

Permalink Reply by Joseph-Ohio on July 3, 2014 at 7:15am

Dexter,

To clarify, I wrote 'over the long term' and didn't mention anything about consistency myself.

To further clarify what I wrote I'll provide an example :

When I 1st started driving in the sixties I remember paying 28¢ per gallon of gasoline at our neighborhood filling stations and of course today we're paying about $3.60 per gallon and have seen spikes over $4.00 per gallon in our area.

Providers use any and every reason to raise prices and they have to for the most part to stay in business.

That's all I was trying to say.

Permalink Reply by Samuel J. Orr on July 2, 2014 at 11:03pm

David: I have some 4th-hand information that one major problem with HK wells in extreme western Mercer County Pa and eastern Trumbull County is that the wells decline to almost nothing rather quickly as a result of the accumulation of paraffin either in the vertical or in the laterals, and that this problem diminishes  the effective diameter of the well-bore thus causing the wells' production to decline precipitously. I really do not know if paraffin could be part of the problem or if this information is at all reliable. I fully agree that wells where the porosity and permeabilty of the shale is higher and where the depth of the oil/gas deposits are deeper which creates greater rock pressure  are three major factors that greatly determine a well's production The paraffin issue may be just nonsense, but I am putting this information out so that people with some technical expertise may clarify whether paraffin is or could be a major issue. I remain convinced that the major problem with the Northern Utica is not the absence of resources, but rather technical problems that thus far have caused difficulty in how to get these resources to the surface..

Permalink Reply by Joseph-Ohio on July 2, 2014 at 11:11pm

Can paraffin be dissolved by injecting some kind of dillutant ?

Or is it impervious to dilution ?

Permalink Reply by Dexter Green on July 3, 2014 at 12:00am

Usually a swab rig is brought in.  Think of it as a giant Q-Tip for the well.  Typically you see paraffin accumulation associated with oilier wells, so the location of this alleged issue makes me wonder about the veracity of that story.

Permalink Reply by Samuel J. Orr on July 3, 2014 at 12:42am

The wells in question were clearly within what maps describe as the oil window of the northern Utica,

Permalink Reply by Dexter Green on July 3, 2014 at 9:28am

Mercer county is now the oil window?  That's...new.

Permalink Reply by Joseph-Ohio on July 3, 2014 at 12:52am
Paraffin is sounding like a fact of life insofar as oil window Utica wells are concerned.
Facts of life are only bumps in the road to be avoided somehow or patched / repaired if unavoidable.
Sounds like a repair / patch job for Utica oil wells to me.
Drill Baby Drill.
Permalink Reply by Bill Frost on July 3, 2014 at 3:54am

 After looking at all the data it seem like the Noble and Monroe County line will be the best all around gas and oil producing wells. The thickness of the formation is 2000 feet thicker in that area than the wells in the north Utica. ( Carroll, Harrison, Jefferson }. They should produce very strong numbers and be the first wells to hit the $2500 an acre mark each month on a 15% gross lease and last a very long time. It also looks like Antero Energy will be the big winners. But it may take another year or two before all the pipe lines are ready to go. Then this area will truly out shine the north Utica. Look for the royalty buyers to pay $20,000 an acre to get people to sell to them and that will be a deal for them if these wells pay strong for 20 plus years!!

Permalink Reply by Joseph-Ohio on July 3, 2014 at 6:45am

Keeping a watchful eye on things as best I can being a layman.

Thanks for your input.

Permalink Reply by Dexter Green on July 3, 2014 at 9:30am

" Look for the royalty buyers to pay $20,000 an acre to get people to sell to them and that will be a deal for them if these wells pay strong for 20 plus years!!"

Well no, they'll pay strong for 2-3 years and then they'll bleed out production at a steadily-declining rate for another two decades.  Same result but different way of getting there.

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