Chesapeake production, profits both on the rise
As Gulfport works primarily in Ohio's Utica Shale, Chesapeake Energy continues fracking away in both the Buckeye State, as well as in West Virginia's Marcellus Shale. Profits and production are both up for the Oklahoma City-based driller that has reduced its work force over the past few months. Chesapeake reported adjusted earnings of $1.325 billion, a 29 percent increase compared to the same period last year, while the company continues growing oil production.
"We anticipate our growth will be led by an increase in oil production from the Eagle Ford Shale and an increase in natural gas and natural gas liquids production from the Utica and Marcellus shales, which will benefit from new gas processing and pipeline takeaway capacity," said Chesapeake CEO Doug Lawler.
Company officials said they drilled the Irons well to a true vertical depth of 9,770 feet. They then drilled a 6,629-foot horizontal lateral to the well from that depth.
"The strong economics of this well appear to be very attractive in today's commodity price environments and we look forward to drilling a number of wells in the surrounding area during 2014," Palm said of the Irons.
Palm said a "good wet gas well" - which would also yield ethane, propane and butane - could "pay off" in just one year. He said it now typically costs the company about $9.5 million to drill a single Utica well.
Many eastern Ohio residents who originally signed leases with Wishgard LLC or Tri-Star Energy have seen those contracts turned over to Gulfport, while Gulfport has also signed many county landowners to their own leases. During 2014, Gulfport plans to use as much as $634 million to drill as many as 95 new Utica Shale wells.
Chesapeake officials previously confirmed they are producing crude oil and natural gas liquids (propane, butane, ethane and pentanes) from multiple wells in Ohio and Marshall counties, in addition to pumping the dry methane. During the 3-month period from July-September, Chesapeake increased oil production by 23 percent from the previous year, while also increasing NGL production by 31 percent during the same period.
In acknowledging the employee cutbacks, as well as asset sales of about $3.6 billion so far in 2013, Lawler said, "I am particularly impressed by the strong performance of the company while we implemented significant transformational initiatives over the past few months. We look forward to achieving further efficiency gains and improvements in returns on capital in 2014."
In the Utica Shale, Chesapeake has drilled a total of 377 wells, with 169 of these producing oil and gas. The remaining wells are waiting on pipeline connections or are in the some stage of fracking.
In what Chesapeake refers to as its "Southern Marcellus Shale," covering Pennsylvania and West Virginia, the company has 62 wells now waiting on pipeline connection. However, daily production in the region is up to 275 million cubic feet per day, reflecting a 123 percent increase from last year. The average ratio for Chesapeake's production in the Marcellus is 13 percent oil, 17 percent NGL and 70 percent dry methane.