By Edward McAllister and Selam Gebrekidan

NEW YORK (Reuters) - Dozens of wells drilled this year across rural Ohio are quietly pumping out the answer to the U.S. energy industry's most loaded question: Is the Utica shale formation, touted as a potentially $500 billion frontier, a boom or a bust?

Yet the answer is likely to remain concealed for some time.

More than a year after Chesapeake Energy Corp Chief Executive and top Ohio driller Aubrey McClendon declared the Utica to be "the biggest thing to hit Ohio since the plow," investors, landowners and even the federal government are still in the dark over the true pace of oil and natural gas production in the state.

That's because Ohio is one of the nation's least transparent states when it comes to energy data - a distinction the industry worked to maintain this year, according to a review of legislative documents and interviews with state and industry officials.

Secrecy still surrounds the most eagerly anticipated drilling campaign in the country, one that began in the middle of last year when McClendon boasted that the 1.3 million acres of land the company had leased could hold oil and gas worth $20 billion.

Months later, with drilling into the 8,000-foot-deep (2,500- meter) formation just starting, he said the Utica - centered under Ohio but reaching seven other states and Canada - probably held hydrocarbons worth $500 billion.

By this spring, a new energy bill being crafted by lawmakers initially included a clause that would have allowed regulators to publicly disclose quarterly energy production data. The current requirement calls for annual reporting.

But the clause was struck from the bill after discussions with the industry, a Reuters investigation has found. Instead the law, which took effect in August, explicitly bars the government from publishing the quarterly figures it now obtains.

Almost every other energy-producing state releases production data and drilling results on a monthly basis; even Saudi Arabia now self-reports its once-secret production volumes once a month. The latest Ohio figures for 2011 provide information on only five wells. The volume of oil and gas pumping out of dozens of new wells drilled this year will not be available until April 2013, as much as 15 months after they were drilled.

In Ohio, companies control the flow of information, and their selective disclosure is creating doubts about Utica's ultimate bounty. It remains unclear whether the Utica will be a major winner for companies who have invested billions of dollars leasing land and drilling there, and for the state's finances, or if it will turn out to be a relative flop.

Drillers such as Devon Energy Corp and Anadarko Petroleum Corp have released information on only about half the 33 wells now producing in the Utica, according to a Reuters review of company filings and state data. The data is often limited, and the companies have no regulatory obligation to divulge the results of every well they drill.

"It gives investors a little bit of concern because you don't have any independent, third-party reporting on any of this data," said Leo Mariani, an analyst at RBC Capital Markets.

"You are reliant on the companies coming out with the data as they see fit to report it. It adds a level of incremental ambiguity."

The growing concern among many is that the Utica, far from being the oil-rich patch originally believed, is largely filled with natural gases and related liquids, whose prices have slumped to near break-even rates for drillers.

Some recall the dramatic boom and bust of Michigan's own shale play two years ago, which fizzled in just months after promptly reported well data showed disappointing results.

The lack of transparency risks testing shareholders' patience for returns on the billions of dollars spent leasing land across the state. It may also put drillers at odds with landowners.

"The industry has lobbied very heavily in Columbus to keep this reporting requirement down to an annual basis," said Ohio Representative Mark Okey, a Democrat, who voted against the bill.

"How are people supposed to understand what their potential royalties might be if there is not reporting on a more frequent basis?"

'NOT QUITE LIVING UP TO ITS PROMISE'

Chesapeake led the charge into Ohio, and others quickly followed. France's Total paid $2.3 billion to buy a share of Chesapeake's holdings, while major oil companies such as Exxon Mobil, Chevron and Anadarko joined in. Minors like Gulfport Energy Corp and Rex Energy Corp are also present.

Since then results have been mixed.

One of the first five Chesapeake wells in the Utica - called Buell 10-11-5 8H - spewed an impressive 9.5 million cubic feet per day of natural gas, according to data released by the Ohio Department of Natural Resources (DNR) in April. But with gas prices trading this spring at their lowest in a decade, the news spurred little enthusiasm.

In August, Devon said results from two wells in the western, oil-rich sections of the Utica were not encouraging.

Well permits, which hit a record high in August after doubling since the start of the year, dipped in September.

Marathon Petroleum, the Midwest's largest refiner, recently made changes at its 78,000 barrel-per-day refinery in Canton, Ohio, anticipating increased Utica crude output. So far it only processes 1,500 bpd of Utica oil and condensates.

"I would say the growth has been slower than we originally anticipated," Donald Templin, Marathon's vice president and CFO, told an energy conference last month.

Even Chesapeake has muted its trumpet.

In an SEC filing this May, the company said it was planning to drill a significant number of wells in Utica's "oil window" over the rest of this year, referring to an area that is expected to hold mostly oil. Three months later it said it "continues to focus on developing the wet gas and dry gas windows," with no mention of oil. Chesapeake declined to comment on the change in description.

Early comparisons between the Utica and the prolific Eagle Ford shale play in Texas are looking increasingly tenuous.

In 2011, one year after shale drilling commenced in earnest in the Eagle Ford formation, oil production had surged tenfold to nearly 120,000 barrels per day, state data show. It has pumped almost 300,000 bpd so far this year.

Ohio pumped around 13,000 bpd last year, a volume that has been almost unchanged for a decade, according to the U.S. Department of Energy. More recent figures are unavailable.

"Initial indications are that it is not quite living up to its promise," said Phil Weiss, an energy analyst at Argus Research in New York. "The Utica does not appear to be comparable to the Eagle Ford, but there is so little data."

'HYPER-COMPETITIVE PLAY'

With Ohio in the grip of a hydraulic fracturing boom similar to the sudden expansions that have transformed Pennsylvania and North Dakota, pro-drilling Ohio Governor John Kasich raced this spring to put in place new regulations, including forcing companies to disclose what chemicals they used in the process.

The first version of Senate Bill 315 also included a clause that required energy companies to provide production data to the DNR at the end of every quarter, not once a year by March 31.

But industry groups wanted to alter the clause to ensure well data remained private, and it was dropped in later iterations of the bill, documents show.

"Companies wanted to continue to report on an annual basis," said Thomas Stewart, executive vice president of the Ohio Oil and Gas Association. "It is a hyper-competitive play, and people who were making those investments on the ground did not want to be publishing that data on a quarterly basis to give their competitors an edge." The association represents producers including Chesapeake Energy, Anadarko Petroleum Corp and Devon Energy.

The law still requires companies to report production data each quarter to the state tax department, which is allowed to share that information with the DNR for budgeting purposes. But the DNR is prohibited from making that data public.

Craig Butler, assistant policy director in the governor's office, said they were "comfortable" with the outcome, which at least provided more frequent data to state authorities.

A spokesman for Chesapeake Energy, which operates 25 of the 33 producing wells in the Utica, said the company did not ask industry groups to oppose the original clause. He declined to comment on the bill, the disclosure requirements, or the company's progress in the Utica.

McClendon himself says secrecy actually benefits his shareholders. He said in November that Chesapeake would stop reporting well-result details to investors because positive well data were driving land prices higher.

With minimal requirements for companies to report their activities once they secure a drilling permit, Ohio's own DNR often relies on company press statements to glean information on the numbers of wells that are being drilled, officials say.

In Carroll County, the heart of the boom with 20 producing wells and another 150 permits to drill, commissioners have no idea about the Utica's progress.

"We don't know what they're producing because they don't tell you until they need to," said Tom Wheaton, one of the three Carroll County commissioners. "I think Ohio is protecting the industry at the state level. I don't see any other value in it except big companies controlling the competition."

Even the federal government is frustrated as it attempts to gather the data necessary to oversee a domestic energy boom that is transforming the nation.

"I think it would be really good for policymakers and the public to know what's going on now," Adam Sieminski, head of the Energy Information Administration, said this month of the need for more federal funds to track domestic energy production in general. "Particularly given the swiftness of the changes taking place."

Yet the EIA, which publishes monthly production estimates by state, says it relies on Ohio's annual year-ago figures to estimate the current year's output.

MICHIGAN EXAMPLE

Most states are sensitive to the risk of publicly releasing information on energy activities by private companies, especially on early drilling results that may tip competitors to a new hot spot. To ensure that companies are not giving away any competitive advantage too quickly, they offer a confidentiality period of three to six months before publishing any so-called initial production data. Once a well is declared commercially viable and enters routine production, most states see little need for secrecy.

In Louisiana and North Dakota, well-specific output is reported monthly. In Pennsylvania, home to the Marcellus shale that overlaps the Utica, it is every six months.

The case of Michigan's Collingswood shale provides a stark example of the power of data in the energy sector.

In January 2010, Encana Corp drilled the State Pioneer 1-3 HD1 well in Missaukee County, one of Michigan's first shale wells.

During the first production test that April, it gushed gas at an impressive 3 million cubic feet per day. Because the 90-day confidentiality period had expired, those results were made public almost immediately, prompting a frenzy of leasing that caused land prices to spike as much as 100-fold.

Output quickly dropped to less than half the initial rate, according to reports that were released in June. "After 30 days or so the trend was that the well had peaked and it was declining," said Larry Organek, an engineer with Michigan's Department of Environmental Quality.

The well was plugged, and the leasing boom came to an abrupt halt.

(Reporting by Edward McAllister and Selam Gebrekidan, additional reporting by Joshua Schneyer and Cezary Podkul; Editing by Jonathan Leff, Prudence Crowther and Maureen Bavdek)