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ODNR issues four drilling permits as activity wanes

SALEM – The Ohio Department of Natural Resources reported four new horizontal drilling permits were issued in the Utica/Point Pleasant for the week ending June 20. Four were issued the previous week.

Drilling activity has slowed with the worldwide oil glut. Oil and gas permitting activity remains at a low ebb in the area.

There were three permits issued in Carroll County – two to Chesapeake Exploration in Orange Township and one to RE Gas Development in Washington Township.

One permit was issued in Harrison County to American Energy Utica LLC in Nottingham Township.

There have been 1,936 horizontal permits issued, 1,512 wells drilled with 906 wells producing in the Utica/Point Pleasant play overall to date.

The number of rigs drilling in the play is at 19, up one from the previous week after holding in the mid-20’s for months.

There were 55 drilling rigs in the play as late as the third week of December.

No rigs are drilling in the Ohio Marcellus shale, according to the ODNR where there are 44 horizontal wells permitted and 29 drilled.

Shale Plays Media reported last week that Eclipse Resources CEO Benjamin Hulburt expects natural gas prices to return to the $3.50 to $4 range, but they won’t get much higher.

“Hulburt explained since there is still a large amount of gas, prices will not stay around $2.80, and that price is not an economical price for anyone to continue production.

Hulburt said Eclipse Resources is searching for potential financial partners but has not moved forward with any due to the company’s drilling advantage, Shale Plays Media said.

He believes the company has the ability to drill faster and at a lower cost “in the deepest and highest pressure parts” of the Utica Shale in Ohio than any other operator, except Chesapeake Energy Corp.

Rice Energy Inc., with 60,000 acres of what the company believes is the Utica Shale’s prime area, said it sees three or four of the counties in the Utica accounting for 90 percent of the shale’s production within the next five to 10 years.

During a Pittsburgh conference last week, Executive Vice President of Exploration Derek Rice said the company has focused its Utica Shale exploration in Belmont County, one of the three counties in Ohio.

It is now expanding into the Utica Shale in Greene County, Pa., and is working on developing a well in the play’s deep shale that has a lateral of an estimated 5,700 feet.

The company said geologically, it’s not a big risk.

Rice said, “We know what the shale looks like. We’re excited about the rock The real question is how cheaply can we drill these wells. They’re going to be significantly more expensive than our Marcellus wells. To compete for capital, we need to drive those well costs down.”

lshields@salemnews.net

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