Halcon Rescources Group, a Houston – based company, has purchased Carrizo Oil and Gas’ share of acreage in Trumbull and Mercer counties. Approximately 19,000 acres was acquired for $43 million. This is part of a familiar pattern in shale plays across the United States, such as the Eagle Ford Shale in Texas. Companies are selling less desirable acreage so that they can focus on drilling operations in areas of the shale where well results are more positive.

In this case, Carrizo Oil and Gas wants to focus on Southeastern Ohio where IP or initial production rates from new wells have surpassed those in Trumbull, Mercer and Mahoning counties. One of the highest producing Utica wells, the Shugert 1-H was recently completed in Belmont County by Gulfport Energy.  Residents of Trumbull, Mercer and Mahoning counties shouldn’t think the shale boom in their areas is over by any means. There is still plenty of oil and gas in the ground in that part of the Utica/Point Pleasant play.  This is all part of a numbers game whereby cash – strapped oil and gas exploration companies must prioritize where to drill wells based on initial production results, and raise operating capital by selling off less productive acreage. In this case, “less productive” happens to be wells that produce more natural gas and natural gas liquids than crude oil, since natural gas prices are depressed.

Richard Hunter, Carrizo’s spokesman told Business Journal that “We’re running out of money to buy more acreage, so we decided to sell what’s in the north,”  Carrizo is looking to use proceeds from sale of acreage in Trumbull and Mercer counties to lease more land in Gurnsey, Belmont and Harrison counties.  Halcon Resources has long term plans for their acreage, with approximately 130,000 acres under lease or soon to be leased in Trumbull and Mahoning Counties of Ohio. Halcon  currently has five permits approved by the Ohio DNR and expects to see its first production from the Utica/Point Pleasant play in early 2013.