MORRISTOWN - Deep within Belmont County lurks a "monster" that is producing as much as 28.5 million cubic feet of Utica Shale natural gas per day.
As Gulfport Energy begins selling methane, propane, butane, pentane and oil from the Shugert 1 well here, the driller's partner, MarkWest Energy, is now processing Gulfport gas from the first phase of its processing complex near Cadiz.
"Gulfport's success in the Utica Shale and the commencement of operations at our Cadiz Complex are significant accomplishments in the ongoing Utica Shale development in Eastern Ohio," said Frank Semple, chairman, president and chief executive officer of MarkWest.
"Early results indicate this play is one of the most exciting new areas for natural gas and liquids production in the United States - and given our leading position in the neighboring Marcellus Shale, we are well positioned to support the producers' future development plans in the Utica."
With natural gas and liquids provided by Gulfport Energy's Utica Shale operations, MarkWest Energy has commenced the first phase of operations at its processing complex near Cadiz.
Gulfport's Shugert well produced an average of 28.5 million cubic feet per day of natural gas, in addition to more than 2,900 barrels of liquids per day. These new numbers are slightly higher than those the company reported in October.
Global Hunter Securities - an investment bank focused on energy - is quite impressed with the results from this Belmont County well.
"The Shugert well is a monster and another positive event for Gulfport as the company continues to derisk its Utica acreage," Global Hunter analysts said in a statement regarding the well.
Companies such as Gulfport, Chesapeake Energy, Chevron and XTO Energy are known in the industry as "producers" because these companies sell the gas they pump out of the ground. Because the wet Marcellus and Utica shale gas requires processing before it can go to market, producers send their gas to companies such as Dominion Resources, Caiman Energy or MarkWest for processing and fractionation.
"Our results to date continue to validate our high expectations for the play and, with the commencement of operations at MarkWest's Cadiz Complex, we look forward to maximizing the play's potential," said Jim Palm, chief executive officer of Gulfport.
In natural gas processing, the dry methane part of the gas stream is separated from the wet portions - ethane, butane, propane and pentane. During fractionation, the natural gas liquids and other substances are separated from each other. These separated gas products are then ready for use, with the ethane possibly going to a cracker plant somewhere in North America. MarkWest plans to send ethane from Cadiz to Gulf Coast markets for cracking there.
By the beginning of 2014, MarkWest plans to have 140 miles of gathering pipeline and gas compression to service the 50 wells Gulfport plans to have producing by then.
In the Mahoning Valley, so far two horizontal Utica Shale wells have been permitted in Trumbull County and 15 in Mahoning County. Only three of the Mahoning wells have been drilled, and none are producing, according to reports on file with the Ohio Department of Natural Resources.
One exploratory well in Milton Township, Mahoning County, permitted May 4, 2011, and drilled by Chesapeake Appalacia LLC produced 758 barrels of oil in 79 days last year. However, the well now is on "inactive status" while the company awaits completion of a sales line, according to information provided to the ODNR.
In Mahoning County two other wells have been drilled or are in the drilling stage. No drilling has yet commenced in Trumbull County.
Tribune Chronicle Business Editor Brenda J. Linert contributed to this story.
Casey Junkins is a reporter for the The Intelligencer in Wheeling.