Massive Deep Utica Wells Bode Ill Wind for Marcellus Shale

Some early deep Utica wells are so huge that experts say they will keep nat gas prices so low that they force companies to curtail drilling dry gas Marcellus wells.

http://powersource.post-gazette.com/powersource/companies/2015/11/0...

Over the past few weeks, the buzz around the Marcellus Shale has actually been about its deeper neighbor, the Utica, where a handful of companies have drilled record-setting wells for record-high costs.

That has been making some people very nervous — not because the dry portion of the Utica underlying southwestern Pennsylvania, eastern Ohio and the West Virginia Panhandle might be too expensive to drill. Instead, it’s because, as some companies predict, it might soon be the least expensive.

“If there’s a shoe to drop that makes things worse, it’s the dry Utica working,” said Jim Crockard, CEO of the newly-formed Marcellus startup Lola Energy Operating Co.

Mr. Crockard founded Lola this summer with a handful of other former EQT Corp. executives looking to capitalize on good prospects left behind by operators that have had to cut back or vanish because of stubbornly low commodity prices. It’s a been tough market for everyone in the exploration and production business, from startups like Lola to megagiants like Royal Dutch Shell.

The glut of natural gas produced from shale wells over the past five years has inundated the market. Each new shale play seemed to outshine the last, with bigger wells and better economics. The price of natural gas futures at the national benchmark, Henry Hub, dipped below $3 per million British thermal units in January and has stayed there, inching closer to $2 in the past few months.

Now, here comes the Utica, another giant gas field.

The so-called dry portion of the Utica contains methane, the fuel used for heating and cooking. “Wet” portions contain methane as well as other natural gas liquids, including ethane and propane.

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Permalink Reply by Jon on November 10, 2015 at 2:10pm
The one that Rex mentioned in its presentation didn't out perform marcellus by very much. It would have to be practically the same price to be worth it unless otherwise drillers are different.
Mike MurphyPermalink Reply by Mike Murphy on November 10, 2015 at 2:24pm

The MONSTER UTICA

Permalink Reply by Tim Tarr on November 10, 2015 at 2:54pm

Dry utica is just starting. Get the completion process nailed and watch !!!! Keep in mind if dry Utica is successful there are 3 formations just below that. Trenton, Black River and Loysburg. The Loysburg has the highest TOC. All are stacked on top of each other. Not like the ~7000 feet between Marcellus and Utica. Might be just be 1870 (Standard Oil) again.

Permalink Reply by searcherone on November 11, 2015 at 11:19am

Loysburg is unknown name to me.    Have heard a rumor, in the other two formations, so much pressure companies don't know how to control that yet.   Any truth to the rumor?

Permalink Reply by Tim Tarr on November 11, 2015 at 1:31pm

In Ohio Loysburg is sometimes referred to as Gull River L.S.

All 3 (Trenton, Black River and Loysburg) are stacked below Utica. To be more precise below the Point Pleasant which is part of the Utica.

As far as overpressurized yes! If i recall there were 2 Utica wells "lost " when drilling started in the "Dry gas" (deep) utica areas. These formations probably won't be developed for a long time. Just booked as probable reserves. It just makes Marcellus and Utica more valuable because the infrastructure will have much longer useful lifetimes. Get multiple production fields for the cost of 1. Makes the "Bean Counters" very happy.

Permalink Reply by searcherone on November 11, 2015 at 7:04pm

Thanks Tim.

Gull River L. S. is also an unknown name to me.   Landowners who have only leased to the Utica/Point Pleasant should also be happy to think about leasing more formations in the future.. .maybe their great grand children will be leasing those formations.

Permalink Reply by lester long on November 13, 2015 at 7:55am
Does anyone have Mr.Crockard his phone number.
Permalink Reply by Pro Geo on November 13, 2015 at 11:04am
I just hope that the Utica drillers pay special attention to supervised bops and pipe. The formation pressures are crazy high as are Utica UPs. Be careful out there !
Permalink Reply by Pro Geo on November 13, 2015 at 11:05am
Super sized
Permalink Reply by Nancy Mosley on November 13, 2015 at 1:47pm

I have read about the West Virginia issue of Forced Pooling which is allowed for the deeper wells including the Utica Shale, where an unleased owner can be forced into a bad lease, including surface use, if the target is the Utica for example. Someone pointed out that EQT has said something about wanting to drill more Utica wells, and I can see how it might be a good strategy for them. This is used as a justification for accepting the proposed forced pooling bill terms, because it would protect landowners from this danger even while it limits their rights on the Marcellus etc. Anybody here have thoughts or insights on this topic?

Permalink Reply by Daryl Brown on November 17, 2015 at 5:50am

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