Ohio natural gas group exec optimistic

BOARDMAN – A top official with Ohio’s oil and gas industry trade association is remaining optimistic about Ohio’s drilling future, saying recent negative reports are based on “flawed” information.

“There is this fairway that starts around Columbiana (County) and heads south. If you are in that area right now, the results are very, very good,” said Thomas E. Stewart, executive vice president of the Ohio Oil and Gas Association. Stewart discussed the state’s drilling outlook when he was in town Monday for the Energy Job Fair co-sponsored by his organization at a Boardman hotel.

Referring specifically to southeastern Ohio counties of Guernsey, Noble and Carroll, Stewart said drillers are producing good results and remain very optimistic.

Moving westward, Stewart pointed out, that mineral retrieval becomes more difficult because the shale play becomes more shallow. Moving west is also Ohio’s higher oil production area.

“The more shallow it is, the harder it is to move product through the rock,” Stewart said. “The oil everybody knows is there, but it becomes more challenging.”

That’s not, however, to say impossible.

“Our industry is very innovative and able to solve problems,” he said.

An April 15 story released by global mass media agency Bloomberg indicated that drillers looking for oil in the Utica Shale Play have been disappointed, leaving some to pull up stakes and sell their mineral rights. Stewart said he believes that story had “significant flaws,” including a mischaracterization of previous predictions. The topic of Bloomberg’s article, repeatedly picked up in recent weeks by other news agencies and business columnists, indicated that U.S. drillers that had been working to unearth projections of $500 billion of oil in the Utica Shale were instead “packing up.”

Stewart pointed out that state geologists previously had indicated only that there was potential, not guaranteed, mineral reserves valued at $500 billion in the Utica Shale.

“I believe, unlike what Bloomberg said, there’s a lot more oil and gas out there, but it involves new innovation and challenges.”

Moving northward into areas of Mahoning and Trumbull counties, drillers are only beginning to unearth the Mahoning Valley’s potential in the oil and gas industry.

BP, which leased mineral rights to about 80,000 acres in Trumbull County, recently began operations on its first well.

“I understand they have one rig running, and they will be the people that will validate the northern end (of the Utica Shale),” Stewart said.

Records maintained by the Ohio Department of Natural Resources indicate BP has a well in Johnston Township, Trumbull County.

BP spokesman Curtis Thomas said recently the company is working on two local wells which will be used as “data” or test wells to gather output data. Thomas has previously said the company hoped to begin drilling locally by this month.

Production reports, required annually in Ohio, were due March 31 from oil and gas drillers to ODNR. The state still has not released the results of those 2012 reports or said when they might be available.

Stewart and other industry and business officials at Monday’s job fair said they were eagerly awaiting the reports.

Meanwhile, Stewart continued his criticism of Gov. John Kasich’s proposal for a severance tax, which would have been levied on minerals when they are “severed” from the ground. The severance tax was among several changes Kasich had pitched to Ohio’s tax structure in his budget proposal for fiscal 2014-15. He had proposed that the tax would, in part, allow reductions in the state’s individual income tax.

The changes were gutted by the state legislature in recent weeks.