Ohio Oil and Gas Association - Exploration Committee Exploration Update

Transcription

1 Ohio Oil and Gas Association - Exploration Committee 2013 Exploration Update Thus far in 2013 activity in Ohio shows the oil and gas industry in transition, perhaps more so than any other year. The Exploration Committee provides this snapshot as a brief update for activity in the first ¾ of the calendar year, rather than waiting another 5 months until the annual winter meeting. Infrastructure projects are where the largest investments are talking place to allow unrestrained production to proceed from the Utica-Point Pleasant play in eastern Ohio (some projects are for both Marcellus and Utica-Point Pleasant production areas), see figure 1. Meanwhile, permitting and drilling of the Utica-Point Pleasant continues with 451 permits issued and 235 horizontal completions filed between January and September 30 of this year (figures 2-4). In all of 2012 only 221 Utica-Point Pleasant completions were filed. A number of operators have now gotten into full pad-drilling mode, some using new robotic rigs capable of walking from hole to hole on the same pad; thus time and costs to drill each well are on the downward trend. A mini-marcellus revival is taking place in eastern Monroe and Belmont Counties with 16 permits issued and 4 completions filed this year (figure 5). A unique set of geologic circumstances provides upwards of 100 feet of combined Marcellus and Burket shales. This area offers a twofer, having both Marcellus/Burket wet gas potential AND deeper Utica dry gas potential. At least a couple operators are drilling both Utica and Marcellus wells on the same pad. Drilling in Ohio s traditional conventional reservoirs has slowed drastically, with only 188 permits issued (and that number may be high, depending on how vertical stratigraphic tests figure into this) and 78 completions filed thru September 30 (figures 2, 3, and 6). Most of these completions have been outside the core area of Utica-Point Pleasant drilling in central and northeastern Ohio, with a few Trenton wells drilled in western Ohio. In 2012 there were 403 completions in conventional wells/reservoirs it does not look like we ll get anywhere near that level in The top five counties for completions thus far in 2013 are Carroll (128), Harrison (36), Guernsey (27), Columbiana (17), and Monroe (15). Knox (9) and Licking (8) had the highest number of conventional completions filed (figure 7). The top five operators by number of completions filed are: Chesapeake Exploration (157), Oxford Oil (20), Gulfport Energy (16), Knox Energy 13, and Hess Ohio Development (12) see figure 8. Since lifting the hold on Class II (salt water injection wells) permits, 21 permits have been issued and 2 completions filed (thru 9-30) figure 9. According to the Division of Oil and Gas Resources Management this takes the total to 231 permitted wells with 188 being on the active list for Ohio figure 10. To state the obvious, we are witnessing a huge transition of the oil and gas industry take place in Ohio. The industry in just a couple short years has gone from drilling large numbers of conventional vertical wells (usually over 1,000/year) with fairly low expected initial production and estimated ultimate

2 recoveries to one that drills very few conventional wells, but several hundred high-cost horizontal wells with very large initial production numbers and estimated ultimate recoveries. Figure 11 illustrates the start of this trend graphically. Since the mid-1980 s Ohio s yearly production has, in a fairly steady fashion, declined from roughly 160 BCF/year and nearly 13 MMBO/yr to a low in 2009 of less than 80 BCF/yr and 5 MMBO/yr - to accomplish that we had an ever increasing number of wells in production. Our conventional reserves were running low and we had to drill more and more wells to get less out of the ground. With the advent of the large horizontal wells we should now see this trend reverse we ll have fewer overall producing wells and our yearly production numbers will climb rapidly. Taking all reported Utica-Point Pleasant initial production numbers (180 wells) released thru yields an average of 4.3 MMCF/d and 302 BOPD. We thank Joe Wells of the Ohio Geological Survey for providing maps and our own Marty Shumway for the charting. - Submitted by Larry Wickstrom, Exploration Committee Chair

3 Figure 1. Current, proposed, and under development oil, gas, and NGL infrastructure. Figure courtesy of Jobs Ohio.

4 Figure 2. Map showing the locations and proposed formations of permitted oil and gas wells in Ohio from January 1 thru September 30, Map courtesy of the Ohio Geological Survey.

5 Figure 3. Map showing locations of all permitted oil and gas wells in Ohio from January 1 thru September 30, 2013 color-coded as to vertical, horizontal, and deviated. Map courtesy of the Ohio Geological Survey.

6 Figure 4. Map showing locations of all oil and gas wells in Ohio with completions filed from January 1 thru September 30, 2013 Pink = horizontal Utica-Point Pleasant (235) and Marcellus (4), White = no formation recorded by Division of Oil and Gas (all believed to be Utica-Point Pleasant), and others, which includes some vertical stratigraphic tests (pilot holes) associated with horizontal shale plays. Map courtesy of the Ohio Geological Survey.

7 Figure 5. Map showing locations of all permitted horizontal Marcellus oil and gas wells in Ohio and those permitted from January 1 thru September 30, Map courtesy of the Ohio Geological Survey.

8 Figure 6. Map showing locations of all oil and gas wells in Ohio with completions filed from January 1 thru September 30, 2013 minus those designated as Utica-Point Pleasant or Marcellus. Color coded by major formations at total depth). White(Wells Drilled) = no formation recorded by Division of Oil and Gas. Map courtesy of the Ohio Geological Survey.

9 Figure 7. Map showing locations of all oil and gas wells in Ohio with completions filed from January 1 thru September 30, 2013 with totals given by county. Map courtesy of the Ohio Geological Survey.

10 Figure top operators by number of completions filed through

11 Figure 9. Map showing locations of all Class II salt water injection wells permits in Ohio filed from January 1 thru September 30, Map courtesy of the Ohio Geological Survey.

12 Figure 10. Map showing locations of all active Class I (hazardous and industrial waste disposal wells) and Class II (salt water injection wells) as well as all Class II permits in Ohio filed from January 1 thru September 30, Map courtesy of the Ohio Geological Survey.

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