Mon., 6am: Drilling permits show shale sweet spot moving south

SALEM – Ohio production figures for natural gas in 2013 nearly doubled from 2012 and with the call for more infrastructure being answered it can only increase in 2014.

The sweet spot is emerging and perimeters are being defined.

The geology, which exploration companies have said all along will dictate where the wells go, is pointing to southern counties in eastern Ohio.

Drilling permits issued by the Ohio Department of Natural Resources show a southward shift into Belmont, Harrison, Carroll and Columbiana counties while Halcon Resources suspended its drilling operations in Trumbull County which now appears to be where the northernmost perimeter in the Utica play is being defined.

The company said it would focus on its holdings in the south and western United States. Halcon Resources holds leasing right to143,000 acres in Ohio and Pennsylvania.

ODNR records show the company has three producing wells in Trumbull County with a pad drilled in Lordstown and a fifth drilled in Warren Township and three more permits in the county.

During its fourth quarter earnings call, Halcon Resources Chairman and CEO Floyd C. Wilson was asked about activity in the Utica play and if the company was going to be patient given the lease terms it had there.

In the Seeking Alpha website transcript of the call, Wilson said, “We can be extremely patient. We don’t have any significant requirements for payments or expiries at this time.

“A little over half of our land is held by shallower, more shallow production, anyway.

“So we’re in a great position to be patient. There’s some other great companies that have been drilling wells up there. We have been working to get all of the wells … and some of the wells took a while to get on because of their distance from infrastructure.

“So we’ve been making sure to get them all on and making sure that we understand what we’ve got up there. So it’s just not a key part of our planning at this moment.”

The news that Halcon suspended its drilling operations raised some eyebrows and following a Farifield Township trustee meeting last week, Chairman Bob Hum noted Halcon’s decision to halt operations while noting it isn’t selling its property.

Note: According to ODNR weekly records for the Utica/Point Pleasant shale plays a total of 1,126 horizontal l well permits have been issued as of March 8.

There are 759 wells that are drilled and 385 that are producing producing. There are 41 drilling rigs operating in the area and three new permits were issues last week … all to Chesapeake Exploration in Harrison County and Monroe Township.

Two weeks ago Sundland Construction, based in Tuscaloosa, Ala., moved into the former People’s Lumber property on Snyder Road in Salem.

The company installs gathering lines from wellsites to main transmission lines.