Update: Gulfport Touts Utica’s Prolific Potential
UPDATE (12/20/2012, 07:00 am ET): It seems Gulfport Energy’s CEO Jim Palm is backing up his claims about the Utica’s prolific potential by acquiring additional acreage. Thanks to the tremendous results of Gulfport Energy’s first 10 wells, they have now procured an additional 37,000 acres. The company paid an approximate $372 million for the additional acreage to Windsor Ohio, a subsidiary of Wexford Capital.
The newly acquired additional acreage now gives Gulfport a total of 137,000 acres to develop in the liquids-rich portion of the Utica Shale. Gulfport is extremely excited about the Utica Shale, and with 3 of the top producing wells in the Utica Shale; it would be hard not to be.
—Original post from November 8th, 2012—
In Gulfport Energy’s third quarter earnings call yesterday, executives from the company continued to tout the outstanding production they have seen coming out of the Utica Shale. Due to the strong numbers they have reported throughout this year, Gulfport is looking to make the Utica Shale their primary focus area. In result, Gulfport will be planning to invest $215-$225 million in Ohio to develop 50 wells over the next year. These wells will be developed in Gulfport’s core area of Harrison, Belmont and Guernsey counties.
Thanks to wells like their Boy Scout, Wagner and Shugert wells, Jim Palm, CEO of Gulfport Energy, sees this play being one of the most prolific shale plays Gulfport has been a part of, rivaling the Eagle Ford.
“We believe that our position in the Utica could be as good as the best part of the Eagle Ford based upon the overall productivity and economics.”- Jim Palm, CEO of Gulfport Energy
In the early exploration of their initial 10 wells, Gulfport performed a myriad of tests while collecting extensive geological data, including full open-hole log suites and a full core from the Utica and Point Pleasant interval. Their findings concluded their original assumptions about the Utica being a prolific play in the United States.
“It’s becoming increasingly apparent that the Utica is a prolific shale play and we are very pleased to have captured a significant position within its core.” Jim Palm, CEO of Gulfport Energy
In an unexpected announcement, Gulfport also released initial production rates for yet another well. The BK Stephens 1-16H located in Moorefield, which is near Piedmont in Harrison County, was drilled to a total vertical depth of 8,225 feet, with a 5,276-foot horizontal lateral. The well was completed using a 19 stage hybrid hydraulic fracture. The well tested at a peak rate of 1,224 barrels per day of condensate and 6.9 million cubic feet per day of gas on a 32/64 inch choke.
The gas being produced is 1,207 BTU rich gas, making it liquids rich. Assuming full ethane recovery, this composition would produce 110 barrels of natural gas liquids per million cubic feet of gas resulting in a gas shrink rate of 11% and a total rate of 3,007 barrels of oil equivalent per day.
This is Gulfport’s sixth well that has come on line this year. All six wells have put out significant initial production numbers echoing their assertion that their Utica holding will be as significant as the best part of the Eagle Ford.
Even though Gulfport has six strong wells ready for production, they are still waiting for midstream infrastructure to be put into place. To date, none of their six wells have been put into full production. Gulfport is working with MarkWest to remedy the issue of the lack of gathering lines to get these wells in production. MarkWest is currently working on infrastructure in Harrison, Noble, Guernsey and Belmont counties to help get these wells on line as soon as possible.
Looking to 2013, Gulfport plans to heavily develop the Utica Shale. Currently Gulport has 2 rigs running in the Utica, but in 2013 they plan to add a rig every two to three months until they have 6 rigs running in the Utica by the end of 2013.
Gulfport and Chesapeake continue to put up strong numbers within the core areas of the Utica. These numbers will continue to grow as methods are tweaked and refined. As it stands these areas will be one of the most significant shale plays in the United States helping to create jobs and opportunity in a portion of the state that needed it the most.