Drilling Prospects Dim for Mahoning County and Trumbull County, Ohio
Oil and gas drilling prospects dim here, expert says
Published: Fri, April 29, 2016 @ 12:08 a.m.
YOUNGSTOWN
If oil and natural-gas prices increase substantially, new well drilling likely will get a boost in Columbiana County, but the prospects aren’t good in Mahoning and Trumbull counties, an industry expert said.
“Right now, you’re really just looking at Belmont, Harrison, Monroe, and maybe a little bit of Noble County” as the focus of drilling activity, said Mike Chadsey, public-relations director for the Ohio Oil and Gas Association, a 3,000-member industry group.
“As the price shrunk, the geographic play shrunk; and, as price expands, the play will expand,” Chadsey said.
Chadsey was among about 65 people who attended a luncheon last week sponsored by the Youngstown/Warren Regional Chamber at Mill Creek MetroParks’ Fellows Riverside Gardens, which featured Ohio Department of Natural Resources officials as speakers.
If oil and gas prices rise, “There’ll probably be a little activity in Columbiana County, but everything that we have seen in Trumbull and Mahoning [counties] doesn’t look like the rock is there,” Chadsey said.
“This is all about what the rock will do – the Utica and maybe the Marcellus [shale]. It just doesn’t seem workable up here,” he said, citing BP’s decision to withdraw from Trumbull County production activities in 2014.
The production numbers reported by ODNR for 2014 and 2015 support Chadsey’s assertion.
In Columbiana County, natural-gas production soared from 21.3 billion cubic feet in 2014 to 37 billion cubic feet in 2015.
That county’s oil production rose from 172,388 barrels in 2014 to 214,412 barrels last year.
In Mahoning County, natural-gas production was a mere 4 billion cubic feet each year, and oil production slumped from 26,929 barrels in 2014 to 22,378 barrels last year.
Trumbull County’s natural-gas production fell from 1 billion cubic feet in 2014 to 628 million cubic feet in 2015, and oil production there plummeted from 40,668 barrels in 2014 to 10,871 barrels last year.
No new oil and gas wells were drilled last year in Mahoning or Trumbull counties, the trade association reported.
The industry needs an oil price between $75 and $80 per barrel to make expansion of drilling activity attractive, Chadsey said.
“Three dollars or $4 an mcf [1,000 cubic feet of natural gas] would make the Utica just very exciting again,” he added.
Drilling is expensive, with each horizontal well now costing about $2 million to drill, he noted.
Oil now ranges from $40 to $43 a barrel, and Chadsey said natural gas is now as low as $1 or less per mcf due to Ohio’s gas surplus and lack of large users.
The new $890 million Lordstown Energy Center, which will be a natural-gas-fueled power plant in the Lordstown Industrial Park, for which site preparation is now underway, will be a large natural-gas user, Chadsey said.
Chadsey said he expects Ohio’s oil and gas production will continue to increase “marginally” this year “as old wells become hooked up to the pipeline network.”
Ohio’s oil and gas production this year will depend on the markets for those commodities, said Rick Simmers, ODNR’s oil and gas division chief, who was a luncheon speaker here.
“I think we’re going to still see an increase, at least for the first two quarters, but it’ll be at a lower rate than it has been,” Simmers predicted.
“If the commodity prices remain low, then into the third and fourth quarters, I would guess that the production’s going to begin to decline, compared to wherever it peaks, but not dramatically,” he predicted.
Ohio’s oil production doubled from 10.9 million barrels in 2014 to 21.9 million barrels last year.
Its natural-gas production rose 110.6 percent from 452 billion cubic feet in 2014 to 953 billion cubic feet last year.
- See more at: http://www.vindy.com/news/2016/apr/29/expert-well-drilling-prospect...
Views: 3274
Replies to This Discussion
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Permalink Reply by Barry D on
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Joseph,
No all zones are the same.
Yes, perhaps some day some company will find a way to produce the northern/western Utica. That day is not in the near future (barring a significant price jump for oil and gas)
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Permalink Reply by Joseph-Ohio on
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That's what I've read a number of times now.
However, some may find it economical earlier than others.
Lots of variables involved.
Being the cynic that I am, also the thought passes through my mind that some may find a lesser profit margin attractive enough to keep themselves in the game whereas others may choose to wait for a better margin. In other words some may find some profit better than none. It would depend on how deep their pockets are.
Lots of variables involved.
Thanks for your input neighbor.
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Permalink Reply by Mike Murphy on
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I disagree the different formations evolved in different times they have different rock they have different faults they have different organic matters that produced different gases and different oils the Utica goes from dry gas to wet gas to light oil to black oil all in one formation so the Utica is different in its self unlike the Clinton that is mostly uniform thru the hole formation and northern was not economical to drill when oil was over 100 dollars a barrel so I don't see it ever becoming economical with all the earthquakes up there no one wants the possible liability that could come from property damages why do you think halcon stopped fracking as soon as a earthquake was indicated in the area last week
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Permalink Reply by Joseph-Ohio on
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I defer to the experts in this instance Mike.
I've read many times here that the Utica was the 'source rock' for the pooled reservoirs tapped by the so-called 'legacy wells' (which I have been interpretting as all of the conventional vertical wells that were developed pre-long horizontal bore technique).
Maybe I'm reading it wrong.
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Permalink Reply by Joseph-Ohio on
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Barry D,
May as well add that I think the biggest reason that they're saying it's not in the near future is because they don't want to be.
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I cant figure out why they would be saving the north for the future its more like Halcon not drilling sany more in northern trumbull they don't want the north .....BP walked Shell walked chesepeake hasn't even tried up there and when mc clendon was sucking up every acre he could he never even looked at the northern ohio area I guess the experts have spoken
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Permalink Reply by Joseph-Ohio on
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Like I said many times over - they drill when and where they want - it's there - when they want it they'll come and get it.
The experts tell us only what they want to divulge and only if it suits them.
My perception is that it's not a matter of 'saving' it - it's more a matter of wanting to develop another area of it first. The term 'cherry picking' comes to mind.
Then there's 'Market Matching' to consider - maybe they have developed enough for awhile the way they see it. Maybe they need more customers / a larger 'Market Share' to give them reason to develop more.
Lot of ground HBP by CHK in northeast Ohio (as I've read here and witnessed) - a huge presence BTW.
There's also alot of court cases holding up the works right now.
There's also that pesky worldwide oil glut brought on by OPEC / SA / the ME to sort out as well as the wars to deal with.
Like I wrote many times earlier there's alot of hurdles / variables affecting this thing.
Alot of sorting out involved.
Apparently, you see it all as condemning - as of yet, I do not.
JMHOs
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Permalink Reply by G.H. on
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Joe, as much as I'd love to see your area of the Utica developed, I think you are really blinded by your optimism. It wasn't economical at prices 1.5-2 years ago, it's not gonna make sense anytime soon unless something really drastic happens with commodity prices. Sorry. Like I said, I htink it would be great to see it all developed, but it seems crystal clear right now what the deal is.
I'm not saying never. But if it wasn't being drilled at $100-$110 oil prices and $3.50-$4.00 gas prices... don't think it's gonna happen anytime soon unless something drastic occurs.
Nothing personal. Just my honest opinion, as you like to say, based on my reading and observations. I'd be happy if I was wrong, but there's definitely no wells being drilled up there to prove that. No interest in new leases either, as far as I know... -
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Permalink Reply by Joseph-Ohio on
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G.H.,
I think we agree on a number of things BUT.......... I don't think you (or anyone) can accurately call my perspective 'blind'.
The resource exists.
When it is harvested is up to those entities with the ability and the desire to do so.
Like I said many times over - they drill when and where they want - it's there - when they want it they'll come and get it.
I think anyone that doesn't acknowledge that, and instead condemns the entire Utica geography as undevelopable in way of oil and natural gas exploration and production / development are overly pessimistic and are thus the 'blinded' ones.
We would love to see fair, land / land owner / mineral owner cognizant development of our natural gas and oil natural resources - including receiving fair compensation for their harvest.
We believe our entire country including it's general population would be greatly rewarded should that happen.
We also believe it could happen at any time; as we also believe the technology already exists to harvest it and is stalled by the many variables / hurdles - politics and greed at the front end of the delay.
We say sooner is better than later for all of us.
That's my take right now and has been for quite awhile.
Good luck to all of us.
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Permalink Reply by G.H. on
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Joe, I don't think anyone disagrees with you that producible hydrocarbons do exist in your area. It is just extremely unprofitable to drill in the current environment, and doesn't look to be profitable anytime soon. From what I understand, producing what is there is difficult, and the oil and gas that is there is in lower quantities than other areas. There are many many other areas in Ohio alone that are MORE profitable than yours, meaning all of those would probably be developed before yours is touched, barring some incredible scientific breakthrough. Your assertion of it's not "if but when" MAY be true, but that "when" seems to be very very far off.
They drill when and where they want, but that is all dictated by economics. The economics in the northern area are NOT good currently.
As Mike says, the companies have "spoken." They are not developing that area now because it does not make financial sense.
Didn't mean to be insulting by calling your optimism blind.
Like I said before, not trying to be a hater. It would be great to see it all developed. I just think this is the realistic view of the situation right now.
Anyway, this topic has been re-hashed to death. I wish everyone luck.
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Permalink Reply by Joseph-Ohio on
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G.H.,
Too many variables and not enough exploration for me to make a prediction.
Many things can happen very fast.
Look how quickly the price dropped.
I think it could recover just as fast / even faster.
It's my home and we're not planning on going anywhere - we'll see when we see.
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Permalink Reply by Joseph-Ohio on
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G.H.,
Sure you meant to be insulting - own it dude.
I know when a wise guy has something offensive to contribute in argument.
Say, are you and Mike related ?
Just curious.
J-O
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