Ohio, Marshall Wells Hitting Oil
Some sites producing hundreds of barrels
22 February 2013
By Casey Junkins, Staff Writer
WHEELING - It may be a little soon to declare northern West
Virginia black gold country, but Chesapeake Energy drew an average
of 290 barrels of oil per day from a single Ohio County well last
A second Chesapeake Ohio County well yielded 195 barrels of oil
each day, while a Marshall County well produced 305 barrels of oil
"We continue to deliver on our liquids growth targets, led by a
year-over-year increase of nearly 40,000 barrels per day in oil
production," said Steven Dixon, Chesapeake's chief operating
officer, as the Oklahoma City-based driller released its 2012
earnings and operational report Thursday. "We believe this
performance ranks Chesapeake among the top three organic oil
growth stories in the industry for 2012."
To this point, most of the focus for drilling in the Marcellus and
Utica shale formations has been on dry methane natural gas, in
addition to liquids such as ethane, propane and butane. However,
Chesapeake's report confirms these materials - as well as the oil
- are being drawn in West Virginia's Northern Panhandle.
In the Ohio Utica Shale, Chesapeake does not show any oil
production from the Cain South 8H well in Jefferson County.
Instead, that well yielded 425 daily barrels of liquids and 6.7
million cubic feet of natural gas. Chesapeake does show Ohio oil
production to the north, however, as one Carroll County well
produced 525 barrels of oil daily.
Chesapeake notes that it holds 1.8 million net acres in the
Marcellus formation. Three wells it sites as examples of its
production are as follows:
"I am very proud of what our team has accomplished thus far and
look forward to driving further liquids production growth and
capital efficiencies in 2013," Dixon added.
However, Chesapeake believes production in the wet zone of the
Marcellus will "remain relatively flat" until the ATEX Express
pipeline opens later this year. The company has agreed to send
much of its ethane to the Gulf Coast for processing via this
pipeline, largely because there is no ethane cracker in the local
Appalachian Resins and Aither Chemicals are two companies hoping
to build crackers in West Virginia, while Royal Dutch Shell has
the option to build one on property near Monaca, Pa. Mountain
State oil and gas industry leaders said they do not believe
Chesapeake's ethane plans should curtail efforts to build a
In the Ohio Utica Shale, Chesapeake holds 1 million net acres. To
this point, the company has drilled 184 wells, 45 of which are now
producing. The company still has $1.15 billion to spend for
drilling and fracking in the Utica region.
Despite all these results, Chesapeake reported a $940 million loss
for stockholders for 2012. Fortunes improved as the year
progressed, however, as the company reported $257 million in
income for stockholders during the final three months of 2012.
"Chesapeake delivered strong results during the 2012 fourth
quarter. I am pleased to reaffirm our 2013 guidance for liquids
production growth and drilling and completion capital
expenditures, while at the same time reducing our cost guidance
for many significant categories," said Domenic Dell'Osso, the
chief financial officer.