Below the Marcellus Shale, Activity Starting in the Utica, NGI's Shale Daily Reports

DULLES, Va.--()--If recently announced drilling programs are any indication, 2011 could be the biggest year to date for Utica Shale exploration.

“Years ago, we were saying such things about the Marcellus and now they're looking at it”

Quietly sitting underneath the Marcellus Shale gas play, the Utica formation that covers a larger area -- from Tennessee into Canada -- is attracting attention from some of the largest shale gas players. And it's not just the Utica. The Marcellus is pancaked in between the topmost Upper Devonian and the Utica, and each has its champions.

To date the Marcellus has garnered most of the attention, but some drilling has begun in the Utica, particularly in Ohio and western Pennsylvania, where the Marcellus thins, making the Utica shallower than it is in eastern Pennsylvania and New York.

That shallower section of the formation is not only cheaper and easier to drill into, but also more prospective, geologists believe. The gas in the deepest portions of the Utica, such as in northeast Pennsylvania, could be "overcooked," (i.e., because of the depth, pressure and heat the gas has been "cooked" out of it), but that threat isn't a certainty, according to Kristin Carter, a petroleum geologist for the Pennsylvania Department of Conservation and Natural Resources (DCNR).

"Years ago, we were saying such things about the Marcellus and now they're looking at it," Carter told NGI's Shale Daily.

There are only two Utica well completion reports in the DCNR files, a 14,464-foot well that EQT Corp. drilled in Greene County in June 2008 and a 12,700-foot well that Range Resources Corp. drilled in Beaver County in January 2010, both located in southwest Pennsylvania.

That should increase this year, although if permitting is any indication, companies are walking, not running, to explore the Utica. In Ohio, where the Utica is shallowest, companies have permitted 28 Utica wells -- 19 vertical and nine horizontal -- and drilled just 14 -- nine vertical and five horizontal -- since the end of 2009. By comparison, companies have permitted 77 Marcellus wells, drilling 49.

Pennsylvania does not track Utica Shale permitting specifically, but the Pennsylvania Department of Environmental Protection (DEP) said 18 wells have been permitted to date to a depth and in regions where the Utica Shale lies, out of nearly 2,000 total well permits issued this year.

Chesapeake Energy holds leases and is working on an agreement with Dominion East Ohio to build gathering systems in the Utica. Other companies testing the Utica include EV Energy Partners, Consol Energy, Seneca Resources and Rex Energy.

Range Resources has done some drilling and sees potential in both the Upper Devonian and the Utica. The company, however, is focusing on the former because it is easier to drill and it collected considerable information on the play when it drilled through the Upper Devonian to reach the Marcellus.

To read the full report on the Utica and Upper Devonian go to http://shaledaily.com/.

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NGI's Shale Daily is the first daily publication devoted exclusively to the enormous shale revolution that is rewriting the energy outlook in North America.

NGI has drawn upon its 30-year experience surveying and publishing natural gas prices to develop the first natural gas Shale Price Indices (SPI) for 11 key unconventional resource plays in North America.

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