Comment

Comment by Philip Brutz on August 8, 2012 at 5:05am

http://ir.gulfportenergy.com/releasedetail.cfm?ReleaseID=698919

In the Utica Shale, Gulfport spud its first horizontal well in February 2012 and spud an additional four gross (1.9 net) wells during the second quarter of 2012. At the end of the second quarter,  three gross wells were completed and in their resting period, one gross well was waiting on completion, and one gross well was being drilled. Gulfport's first horizontal well in the play, the Wagner 1-28H, was recently brought online from its resting period and tested at a gross peak rate of 17.1 MMCF per day of natural gas and 432 barrels of condensate per day. Based upon composition analysis, the gas being produced is 1,214 BTU rich gas. Assuming full ethane recovery, the composition above is expected to produce an additional 110 barrels of NGLs per MMCF of natural gas and result in a natural gas shrink of 18%. In ethane rejection mode, the composition is expected to yield 41 barrels of NGLs per MMCF of natural gas and result in a natural gas shrink of 8%. Gulfport currently plans to produce the Wagner 1-28H into a natural gas pipeline at a rate of approximately 10 MMCF per day of natural gas.  At present, two rigs are drilling ahead on the sixth and seventh wells of 2012 in the play.

Comment by Finnbear on August 7, 2012 at 12:20pm

The DNR report below is still inaccurate and lags WAY behind reality. The Recent* Utica Shale - Ohio Activity report shows the Medina well as "Waiting to frac well". This well was fracked months ago. The Wayne county well shows no activity, yet there is a rig erected onsite. There are a number of other wells where I know the current state is not what the reports show. Don't put a lot of stock in what you read on these reports - the state is way understaffed and can't begin to keep up.

Comment by Shower Bath on August 7, 2012 at 10:45am

Here's Gulport's financial, with the numbers for the Wagner #1 well. Keep in mind that the drilling unit is 1277 acres, with the longest lateral drilled to date in Ohio. Looks pretty good to me. See the link...

http://ir.gulfportenergy.com/releasedetail.cfm?ReleaseID=698919

Randy

Comment by Shower Bath on August 7, 2012 at 5:49am

The DNR has updated their permit/drilling activity report for last week. See the link...

http://www.ohiodnr.com/oil/shale/tabid/23174/Default.aspx

Randy

Comment by Peter Schueler on August 7, 2012 at 12:54am

Randy, Thanks for the links you posted below. Here's CHK's statement for their Utica wells "Of the 28 wells with production information in the focus area, on a post-processing basis, peak rates have averaged approximately 1,000 boe per day, consisting of approximately 205 bbls of oil, 150 bbls of NGL and 3.8 mmcf of natural gas per day.

Doing some numbers on this to calculate $/month per well

205bbls oil x $90/bbl = $18,450/day

150bbls liquids x $20/bbl = $3000/day 

3.8mmcf gas x $2500/mmcf = $9500/day

Total/day = $30,950/day gives total/month 30 x 30950 = $928,500/mo

For a 640 acre unit that gives 928500/640 = $1451/mo per acre

20% royalty/acre = .20x1451= $290/mo/acre.

Two notes, the $20/bbl for liquids assumes $.48/gallon average for the various liquids components and the 640 acres per unit is the typical unit size but it could ultimately accommodate 4 wells. My thinking is that producers will drill only one well per unit initially to hold those units and try to maximize the acreage they hold by production prior to lease expiration  dates.

The big unknown is the rate of decline in production. What will be the production in the future years? I haven't seen any projections on this for the Utica.

Comment by Shower Bath on August 6, 2012 at 3:01pm

Here's the link to Chesapeake's quarterly financial/operational results. Looks like they will be ok if all of their planned asset sales go through. There is detailed info on all of their plays, including the Utica. See the link...

http://www.chk.com/News/Articles/pages/1722883.aspx

Randy

Comment by Shower Bath on August 6, 2012 at 1:33pm

Oooops, a senior moment. The link below is for Gulfports quarterly financial/operating report. They may disclose what they have in the Wagner well. Tune in.

Here is the link to the NGL pricing story.

http://seekingalpha.com/article/783961-how-the-shale-boom-is-causin...

Randy

Comment by Shower Bath on August 6, 2012 at 1:25pm

A good article on NGL production and pricing. This has to be our biggest worry going forward, as over-supply will reduce our royalties. See the link...

http://ir.gulfportenergy.com/releasedetail.cfm?ReleaseID=695109

Randy

Comment by Peter Schueler on August 1, 2012 at 11:37am

Al, you really made a good decision on your resources and I'm sure it will reward you in the near future. As for hydrocarbon prices, they will go up and then down, timing and amounts unpredictable but long term up. You can compare O&G drilling to farming, when yields are up, prices tend to be low and visa versa. O&G from shales is giving high yields but at lower prices.

However, NG prices are coming back and closed today at $3.16/mcf. Natural gas has begun to supplement or replace coal in many power stations. I believe compressed natural gas for vehicles will become a growing market that will support prices.

Comment by tom dowdle on August 1, 2012 at 11:19am

How do pipeline companies pay for easements?

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