The Trenton Limestone:

The Trenton Limestone and accompanying Black River rocks are important in that they serve as the source for much or all hydrocarbon formation in the Appalachian basin. Generally speaking, the Trenton Limestone serves as a cap rock for the underlying Black River source rocks. Because it is not as thick here in Ohio, it has allowed hydrocarbons formed by the Black River group to migrate naturally into the Utica/Pt. Pleasant. To the East, in West Virginia and Pennsylvania, oil and LNG’s may be trapped deeper, or their thermal maturity may have been negatively impacted by the thicker Trenton preventing occurrence of such desirable migration into our porous Utica.

Generally speaking, as hydrocarbons were formed in these source rocks millions of years ago, the process of migration occurred whereby oil and natural gas moved upward through adjacent formations, impeded and impacted by the porosity and permeability of structures located above them. Where significant porosity exists, the structure will absorb and contain the hydrocarbons, holding them in either a conventional or unconventional reservoir (shale). Where permeability allows, the oil or gas will continue to rise toward the surface, passing through one formation and continuing to move upward. Shale is typically low in permeability (the Utica is especially impermeable) and serves as a containment source that stops migration and creates a reservoir. Because it is high in porosity, the Utica is particularly adept at serving as a reservoir because it stops the hydrocarbons from continuing to migrate, and absorbs and holds them in containment.

The stacked layers of shale and interbedded limestones existing in Ohio adjacent to the Utica, referred to alternately as either the Upper Devonian Shale or the Point Pleasant, serve further to absorb and contain whatever materials make it through the maze of permeability problems posed by the Utica. Upper Devonian shale may include not only the Utica, but any number of interbedded gray or black shales, including the Rhinestreet shale and Burkett shale. For general discussion purposes, we will address them as being one and the same, with the bulk of the discussion being directed more specifically to the Point Pleasant, which merges with the Utica as it enters Ohio, forming an attractive target for exploration. (Exhibit 7)


The Point Pleasant Formation:

The Point Pleasant formation has been described as marking the end of Middle Ordovician time. The Ordovician Period is characterized as the greatest submergence of the North American plate because shallow seas covered such an extensive area, including all of Ohio. In this environment, the Acadian mountain-building event occurred whereby sediments high in kerogen were shed from the highlands into a somewhat enclosed basin, lowering the amount of available oxygen. (Exhibit 8) As they were buried and subject to the pressure and temperatures of the earth’s crust and core, the environment became conducive for the formulation of petrocarbons, especially oil and natural gas liquids. (*12)

The appropriate balance of hydrogen and carbon along with the corresponding favorable oxygen/carbon ratio (along with suitable temperature levels) created primarily type one or two kerogen content materials. Because they were formed from fossils containing mostly proteins and lipids, and to a lesser degree, from pollen, spores, or plant/animal decompositions, conditions became prime for oil or a mix of oil and wet gas. (*13) It is particularly important to recognize that the Utica and especially the Point Pleasant have both been identified as having high TOC (total organic content) and type one or two kerogen levels, two of the most important factors to realize if you are indeed searching for wet petrocarbons i.e. oil or natural gas liquids.

The Point Pleasant is characterized as having “three westward-thinning tongues of calcareous strata separated by shalier eastward-thinning tongues.” It is further described as being 60% limestone and 40% shale, interbedded, gray to bluish gray in color and up to 200’ thick in parts of Ohio. A well log which I located from a Tuscarawas County well showed the Utica/Pt. Pleasant merged to create a 255’ core with an excellent TOC as high as 3.73%. (Exhibit 9) Pretty damn impressive. Chris Perry, chief geologist with ODNR, claims the Point Pleasant to be the sweet spot of the entire play, with the highest TOC and a propensity to be highly brittle and contain significant natural fractures. Further, he claims formation thickness of as little as 50 feet to be commercially productive.

ODNR’s Larry Wickstrom (previously) offers that the formation lies just beneath and adjacent to the Utica making the formation “actually thicker and higher in total organic content. It is very unusual. It is a black organic-rich crystalline limestone interlayered with black organic-rich shale. The Utica is a wonderful rock, but it is even better with the Pt. Pleasant beneath it. Since it is interlayered with the Pt. Pleasant, it is more frackable.” He believe the Utica/Pt. Pleasant package covers most of Ohio, but to what extent it will be commercially productive remains to be seem.

It is important to recognize it as being calcareous shale because it contains a high calcium carbonate content derived from ancient algae, which is the perfect content for petroleum formation. Consequently it is high in TOC and contains level one kerogen, making it a perfect source for formation of hydrocarbons, especially oil. The Point Pleasant and the Utica are both identified as having a much higher carbonate and lower mineral clay content than the Marcellus. It is exceptionally similar to the Eagle Ford. If only we are so lucky. Production and fracking techniques will likely be borrowed from experience gained in the Eagle Ford play. (*14)

Now is the time to make a bold statement. The characteristics described in the preceding two paragraphs could easily be used to describe the Bakken. It is not a true shale play. Instead, it is various limestone and sandstone formations interbedden with shale. Consequently, it can achieve optimum production only through horizontal drilling and hydraulic fracturing.

Gulfport Energy, who holds a quite substantial leasehold interest in Ohio and who has delivered many of the best wells here released the following prospectus as to their interest in the Utica shale here. They purport to have a drilling cost of less than or equal to the Bakken or the Eagle Ford. Further, and or more importance, they purport to have more oil in place, a higher recovery factor, better average formation thickness, and a much higher porosity then either the Bakken or the Eagle Ford. If they are only half right, this will truly be one of the best shale plays in America, based upon potentially productivity and the simple economics of the deal. Considering the results of their recent Belmont and Harrison County completions, it is no wonder that they recently paid $10,000 per acre to acquire 30,000 net acres from Windsor Ohio, LLC in Eastern Ohio, the highest price paid to that date so far in Ohio. Speculation is that it is concentrated primarily in Belmont and Monroe counties, although no specifics were released.

Generally speaking, the Point Pleasant exists above the base of the Trenton limestone to the base of the Cincinnati group (Kope Formation). Of importance is noting that the source rocks of the Trenton limestone and the Point Pleasant formation have been credited with generating 75 billion bbl of oil. Of this, due to permeability of subsequent formations, some has migrated into the Silurian reservoirs, including the Clinton Sandstone. (*15)

The Clinton Formation

The Clinton formation has long been the most prolific producing formation in Ohio, with production as far back as 1887. Over 100,000 Clinton wells have been drilled in Ohio. It experienced a renaissance in the 1950’s with the introduction of hydraulic fracturing. During the late 70’s and early 80’s, the Clinton ran rampant. During the peak year of 1981, there were 6085 wells drilled in Ohio, of which 76% were completed in the Clinton sandstone. Because it is interbedded with shale, it responds well to artificial stimulation. Using this technique, the Clinton success ratio increased to 85% completions. (*16) This was 30 years ago! The Clinton is famous in Ohio and for good reason. Let me tell you why that is newsworthy.

Despite its prolific history and reputation, the Clinton has been proven to hold only those hydrocarbons which escaped through permeable sections of the Utica/Point Pleasant. In fact, of the 75 billion bbl of oil generated by lower source rocks, only 400 million bbl of in-place oil can be accounted for, including all Clinton production going back 125 years and encompassing thousands of wells. Obviously, there is a huge amount stored in the lower reservoirs (i.e. Utica and Pt. Pleasant) waiting to be discovered. That is our target.

Further, studies of well logs from these many wells have allowed us to pinpoint very specific areas which have an extremely high propensity for oil. Interpreting these well logs give us targets with which we can search with almost absolute certainty - at least, with as much certainty as you can achieve in this business. A recent study by the Ohio Department of Natural Resources tried to come up with an approximation of the recoverable reserves relating to the Utica Shale only, and estimated that the formation might hold from 1.96 to 8.2 billion barrels of oil equivalent just from Ohio alone. Yes, that’s billion, with a capital B, and does not even take into account the accompanying Pt. Pleasant or Upper Devonian Shale formations. Of recent interest was a quote from Terry Engelder, among the country’s most respected geologists (credited with discovering the Marcellus) purporting these estimates to be, in his estimate, artificially low.

In researching this project, I located a study proposed to geologists and petroleum engineers at the 2011 Winter Meeting of the Ohio Oil and Gas Association. It was prepared by Martin Shumway, CPG, PE with MacKenzie Land & Exploration, Ltd. It considers all costs associated with establishing production – lease, drilling, pipeline and operating costs, etc. and uses township boundaries as geographic areas for analysis. It uses a controlled data base of over 15,000 Clinton wells reporting production since 2005. 168 townships were included in the report.

Exhibit 10 is a map from the study showing Clinton wells used in the study superimposed on central and Eastern Ohio. Wells reflected in green are oil producers. The red wells are primarily dry gas. What we can learn here is where the most profitable Clinton wells are, especially which ones likely contain oil only because it has been allowed to bleed through the Utica or Pt. Pleasant containment because of lesser permeability in that area. It is a reasonable assumption that much more oil lies beneath the Clinton, trapped in the Utica/Pt. Pleasant due to the excellent porosity of the formations.

We can now identify target areas by shale thickness, TOC levels, kerogen content, structure depth, thermal maturity levels, and known oil reservoirs. Again, proper due diligence in terms of research increases our level of success exponentially. I am confident in my research. It all comes from reputable sources that do not have a dog in this hunt, and no secret agenda to promote. What was once speculation is now becoming cold hard facts, and exactly the kind producers so eagerly anticipated.

• My blogs are all original in nature and may make reference to bibliographical references or exhibits not necessarily contained here. Almost all are excerpts are from copyrighted material entitled “The Utica Pt. Pleasant Play in Ohio”