FPS staff report
August 12, 2014
Chesapeake Energy officials shared some good news last week: production is up 373 percent from the previous year.
The Oklahoma City based drilling company released its second quarter 2014 financial and operational results, which showed net production in the Utica Shale averaged approximately 67,000 barrels of oil equivalent (boe per day) during second quarter of 2014, an increase of 373 percent. Approximately 10 percent of the company’s Utica production during the second quarter was oil, 30 percent was natural gas liquids (NGL) and 60 percent was natural gas.
During the quarter, Chesapeake operated an average of eight rigs and connected 48 gross wells to pipeline, compared to an average of nine operated rigs and 47 gross wells connected during the first quarter. The average peak production of those 48 wells was approximately 1,200 boe per day.
As of June 30, the company had 210 wells awaiting pipeline connection or in various stages of completion in the Utica. In June, the third phase of the Kensington gas processing plant, located in Columbiana County, was placed into service. This incremental capacity will enable the company to connect more Utica wells to sales during the second half of the year and begin to reduce its inventory of nonproducing wells.
“Chesapeake delivered solid organic production growth in the quarter while continuing to demonstrate capital discipline and efficiency,” said Doug Lawler, Chesapeake’s chief executive officer. “As a result, we are increasing our 2014 production outlook while leaving our capital budget unchanged. In the 2014 second half, we plan to connect approximately 35 percent more wells to sales than we connected in the first half of the year. As our pace of well connections accelerates, we expect our production growth trajectory will increase accordingly and we anticipate our year-end 2014 exit rate will exceed 730,000 boe per day.”
According to the Ohio Department of Natural Resources Division of Oil and Gas Resources Management’s online statistics as of Aug. 2, ODNR has issued a total of 1,428 permits for drilling in the Utica shale in Ohio since December 2009.
A total of 997 Utica wells have been drilled since December 2009 and 487 wells are in production.
Carroll County is first in the state in the number of permits issued with 423. A majority of the wells in Carroll County have been drilled by Chesapeake.