Earlier this summer, Gazette-Mail business writer Andrew Brown produced a detailed look at how West Virginia’s oil and gas industry uses partition lawsuits to assemble the mineral rights it wants to pursue natural gas drilling in the Marcellus Shale region. Now, Andrew has spent some time examining the recent hype over the Utica Shale and provides us with this guest blog post:
Based on reports, one can be forgiven for believing that West Virginia is about to witness an immediate surge in gas exploration in the state’s northern counties. Over the past month, coverage of the gas industry has been fueled by a new study by West Virginia University that suggests the state may be sitting above another one of the world’s largest gas reserves – the Utica shale, a formation located several thousand feet below the now well-known Marcellus.
When the study was unveiled in Canonsburg, Pa., on July 14, numerous stories were written that played up the Utica’s potential and the possibility of the formation overtaking the Marcellus as the primary target of gas companies.
The State Journal wrote:
While the Marcellus Shale basin has been getting most of the credit for West Virginia’s recent natural gas boom, a recent West Virginia University study suggests the Utica play could soon fall under the spotlight.
Data from the Utica Shale Play Book Study, a two-year geological study conducted by the Appalachian Oil and Natural Gas Research Consortium, suggests the Utica Shale play is much larger than original estimates, and its size and potential recoverable resources are comparable to the Marcellus play, the largest shale oil and gas play in the U.S. and the second largest in the world.
The Exponent Telegram quoted Doug Patchen, the director of the Appalachian Oil and Natural Gas Research Consortium, the WVU group that led the study:
“It certainly has that potential. Right now, we’re estimating it has an equal potential, at least, to the Marcellus. It’s just a matter of time,” Patchen said.
With all of this hype over the formation, it should come as no surprise that gas companies – some of which helped to fund the study — took the opportunity to emphasize their plans to drill their first Utica wells in West Virginia. On July 31, the EQT officials emphasized the results of a Utica test well in Pennsylvania and reiterated their interest in drilling another well in Wetzel County later this year. As the State Journal reported:
EQT Corp.’s test well in the Utica Shale in western Pennsylvania has produced more dry natural gas than expected, so now the question is whether the Utica test well it plans to drill in Wetzel County soon will deliver the same results.
And less than two days after the study was released, Antero Resources jumped on the opportunity to announce its first exploratory well in Tyler County. The Exponent Telegram predictably linked the company’s announcement to the WVU study:
News of Antero’s first Utica well in the Mountain State comes as new research suggests the gas play contains far greater reserve than originally thought. On Tuesday, researchers released the results of a West Virginia University-led study that concluded the Utica holds 782 trillion cubic feet of technically recoverable natural gas and another 1,960 million barrels of oil.