Ohio's Utica shale is shaping up as a gas-rich, not oil-rich play

http://www.ohio.com/blogs/drilling/ohio-utica-shale-1.291290/ohio-s...

The data appears to show that the Utica shale will be dominated by natural gas more than oil. The oil volumes were lower than had been projected, and that’s likely a disappointment to analysts and energy companies.

"It’s shaping up largely as a natural-gas play," said Tom Stewart, executive vice president of the Ohio Oil and Gas Association. "I’m not disappointed or discouraged by the numbers. … But this is a process that takes time to develop."

It is possible that large quantities of oil may still be found in sections of the Utica shale in Ohio, he said.

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Permalink Reply by Booger on May 16, 2013 at 4:33pm

Kangaroo - do you know the depth of the "shallow edge of the eagleford oil window"?.....just curious how that compares to utica's western depths.

Permalink Reply by Kangoo on May 16, 2013 at 6:10pm

Talking about the 6000 ft to 7000 ft range, though this has a lot to do with maturity/deposition, etc.... (the Eagle Ford is in general deeper than the Utica, with the oil window going to 11000 ft depth and the gas window being even deeper). Therfore one cannot compare depths between different plays.

The Eagleford depth decreases from the gulf coming towards the North West.

https://www.rrc.state.tx.us/eagleford/images/EagleFordShalePlay2013...

This map shows the rather narrow economic gas and oil window (red is gas, green is oil). The areas further to the south/east are getting very deep (uneconomic for dry gas), the areas to the North West are getting very shallow/immature with low pressure and higher viscous oil and lower oil gas ratio.

An example for the shallower edge of the Eagelford is Western Frio county.

The link below is from an Eagle Ford forum, but it could also be from the Utica (very similar discussion on the shallower parts of the oil window).

http://eaglefordforum.com/forum/topics/western-frio-county-hwy-57-area

What happened in the Eagleford and will also most likely happen in the Utica will be that the big oil/gas companies will focus on the deeper sweetspots and smaller/lower cost companies will pick up the marginal acreage and will try to make it work.....

Permalink Reply by Paul Martinelli on May 17, 2013 at 1:30am

So....can we expect to see a new map of the NG/NGL/Oil  windows of the UTICA, or are they unchanged by the data thus far?

 

 

Permalink Reply by Samuel J. Orr on May 17, 2013 at 2:44am

        Kangoo: Very clear explanation of something I previously did not understand at all ! Your posts are an example of what this website can be at its best, whereas the postings of Frank Dux and GG often represent the website at its very worst!

Permalink Reply by gary SWF on May 17, 2013 at 12:55pm

Sam, I agree with everything you have said ......

Permalink Reply by The Hiker on May 17, 2013 at 1:38pm

Kangoo:  Thanks for the explanation.  I too enjoy reading the facts from one who knows, and this is the main reason I read this site.   Sometimes you find some pearls like your discussions.   Keep up the good work.

Permalink Reply by Bernie Horabik on May 18, 2013 at 6:45am

What is the best royalty language to get paid for processed NGL's and/or any other products after it leaves the wellhead for processing?

 

I'm going to sign a lease this week but I'm not satisfied with the royalty language.

 

The current version says gross for any oil, gas and/or other hydrocarbons calculated at the wellhead.

 

My concern is the gas is in its raw unprocessed state at the wellhead.

 

Will I get paid for the end stripped and/or processed NGLs?

 

Thoughts?

 

Permalink Reply by Kathleen on May 18, 2013 at 7:54am
I think you will get different opinions on this topic and it is something worth searching the site about, since its been discussed in a few different threads.
IMO, it would depend on who you are signing with. If it's CHK, I would have my lease state, "no deductions of any kind and sold at the current published market price at the well head". Good luck on that wording :0(.
Also, remember to add language about any new taxes any government agency can think of in the future, the oil/gas co. will be responsible to pay.
You could loss 4% more if the Ohio governor has his way in the future.
Permalink Reply by Missy Boardman on May 19, 2013 at 3:08am

I've thought about this quite a bit and I know I've seen posts on the subject.  Here's my thinking on the subject;  For ease of explanation, lets say that you get $1.00 for gas at the well head.  But on the other hand your gas company enhances it and is able to sell it for $2.00.  They deduct 30% for this enhancement (which is what I've read on here they roughly deduct).  So instead of a $1.00 you'd make $1.30 with the 30% deducted. Obviously If I was the gas company I'd rather pay you at the well head so I didn't have to pay you the extra $0.30.. 

 

BTW, I'm leased with CHK and received my first royalty check at the beginning of the month.  I was paid for NG per MCF, Oil per barrel, and NGL per gallon.  I do have a " enhancement addendum" in my lease and there were no deductions for enhancement from my check.  I'm not sure if any of it was enhanced but if it was I was not charged for it. 

Permalink Reply by evan on May 22, 2013 at 1:32pm

Could you give us an amount of acres that you have in the unit and roughly what royalties are per acre. I know its alot to ask but theres alot of us thats curious. I may be entering into a lease with Chk also 

Permalink Reply by Missy Boardman on May 22, 2013 at 2:15pm

Sure, I am in one ~439 acre production unit with 1 well lateral.  I made about $66/acre per month with a 12.5% lease.  I was paid for the oil which was about on average for 3 months @ $84/barrel.  The natural gas was on average for 3 months @ about $2.40/mcf and the natural gas liquids for 3 months was about $0.92/gallon.

 

The total volume of oil recovered was about on average 1,400 barrels/month.  The gas recovered on average was about 22,000 mcf/month. The natural gas liquids was about on average 55,000 gallons/month.

 

In closing I'll just say that based on what I was paid for, OIL was the one I made the most money on.  So it may not hold true for the rest of the play but the play under me is pretty OIL rich.  I know your next questions is where am I located...well, I'm not going to say exactly but I'm North of 171 and South of 30.

Permalink Reply by TM on May 22, 2013 at 2:25pm

How many acres do you have in the unit?

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