Utica Shale Penn State Webinar 6/14

Utica people,

The ITG Penn State Webinar from June 2014 is available here .

This is the webinar that member Greg B highly recommended in his blog here .

Phil

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Permalink Reply by Philip Thackray on July 12, 2014 at 1:50am

Recorded version here

Phil

Permalink Reply by paleface on July 13, 2014 at 1:37am

 Penn State missed the boat again,they don't even mention Northern Tioga County PA.Shell has been drilling Utica wells for over a year they stopped for a short period in the worst part of this past winter.Shell said Middlebury and Chatham have paid for there entire purchase of East Resources. The count so far is drilled and being drilled 23 Utica wells. 

Permalink Reply by Philip Thackray on July 13, 2014 at 2:21am

Paleface,

The presentation is not from Penn State but from ITG; an investment firm.  Penn State "moderated" the presentation.

What do you know about the Shell Utica wells in Tioga County?  Any production data?

Do you have a well name or two that you know was drilled to the Utica?

Phil

Permalink Reply by Todd on July 13, 2014 at 8:26am

Thanks Phil,

Those EUR's on Slide 25 appear to be very low estimations.

For instance, according to Consol, for a 8000' lateral at the Pittsburgh International Airport, the estimated EUR for the Utica is 14.1 Bcf:

See Analyst Day presentation, Page 90

http://phx.corporate-ir.net/phoenix.zhtml?c=66439&p=irol-presen...

According to this ITG presentation, EUR in the same proximity is showing 7.4 Bcf for a 7000' lateral on slide 23.  For that same 7000' lateral, Consol's EUR is 12.34 Bcf. 

The EUR is also highly dependent upon the number of frack stages. 

                                                         Todd

 

Permalink Reply by Philip Thackray on July 13, 2014 at 8:54am

Todd,

IGT is a group of egghead investors trying to analyze energy investments with regard to return on investment while Consol is a bunch of snake oil salesmen trying to stimulate the price of their stock.  I believe IGT is somewhat overly pessimistic and I think Consol, Range, Rex, you name them, are very overly optimistic with their EURs.

At the very least it is nice to see a presentation that is not made by the person selling the product!!

I would love to believe the O&G people but I'd probably bet that what happens in twenty years looks more like what IGT said than what Consol said.

Since most landowners didn't pay for their royalty stream any income from G&O to the landowner is all positive.

If IGT is correct, eventually operators will walk away from low NPV plays.  Then there is no royalty.

That being said, there looks to be lot of Utica potential here in PA.  I just looked at a Shell Utica well in Tioga County, 7.6 Million cubic feet a day average over a 48 day period.  What I don't know about the well is the upfront and on going costs and the decline curve.  It may not be a very good well when analyzed.

Phil

Permalink Reply by Todd on July 13, 2014 at 9:22am

Phil,

I agree with what you said for the most part.

In addition, I have started looking at pipeline company investor presentations which are not as isolated as single company presentations when it comes to state lines and acreage.  Many of the pipeline companies are looking at the nation as a whole.  Of course, they're snake oil salesmen too but just in a broader sense.  That being said, check out the stacked shale play locations according to Enterprise Product Partners Analyst meeting in March:

Slides 2 and 4 (pages 23 and 25)

http://media.corporate-ir.net/media_files/IROL/80/80547/presentatio...

I like those maps.  And I think ITG missed the mark on this one.  They called it "a glimpse into the future of the Utica" but the numbers they used are past results from "old technology" from 2 to 3 years ago when extrapolating future production.  New fracing and completion technology continues to increase EUR's.   

                                                      Todd

Permalink Reply by Philip Thackray on July 13, 2014 at 9:46am

Todd,

That presentation supports neither the high nor low EUR claims since no EURs are given.

However, it is nice to see their positive commitment to the future of G&O in our region and the mention of stacked pay zones. 

Did you see my analysis of the Trumbull County, Ohio Kibler well here (page 7).  If you are interested, print out the two PDFs and bring the xlsx up on your screen.  The xlsx does not print as a spread sheet.

Good to talk to you,

Phil

Permalink Reply by Todd on July 13, 2014 at 10:51am

                                  U.S. Still in the Early Innings

              "Stacked Pays & Technology Will Increase Supply"

That's the heading on slide 3 (page 24) of the above Enterprise Partners analyst presentation. 

My point is that the locations with high GIP will eventually (hopefully sooner than later) be drained for the Utica and all other highly productive zones.  The areas with high porosity and high pressure are to the south in the Utica play and that has created the current core.  However, the areas with the highest GIP are to the northeast with an organic Utica Shale as well as the organic Point Pleasant at shallower depths.  So, it is conceivable that both the upper Utica and Point Pleasant both could be produced.  Look at the porosity of western Beaver County Utica and PP for instance on the ITG presentation.

As far as IP's and EUR's, I have a good Range presentation on the Utica from last fall.  I can't locate it right now as I am at work.

Thanks for your analysis of the Kibler well - I'll review.

Good talking to you again as well,

                                                      Todd

Permalink Reply by Philip Thackray on July 14, 2014 at 1:04am

Todd,

I remember a Range Utica specific presentation but it is no longer up on the Range website.  Did you make a copy?

Phil

Permalink Reply by Todd on July 14, 2014 at 1:52pm

Phil,

Enjoy!  Now tell me who you believe for future EUR's...

Range, Consol, CHK or ITG?  You be the judge.

Todd

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Permalink Reply by Philip Thackray on July 14, 2014 at 2:03pm

Todd,

Thanks for posting that.  I'm still very cautious about industry predictions.  Why wouldn't you be?

Best regards,

Phil

Permalink Reply by Joseph-Ohio on July 14, 2014 at 2:30pm

EUR = Estimated Ultimate Recovery in this parlance as I interpret.

What's the holdup recovering it ?

Wonder what they're waiting for ?

World War 3 ? 

Oh my bad we're probably up to 4 or 5 aren't we ?

Just my crumby sense of humor kicking in here - don't mind me !

Thanks for the data men.

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