MOUNDSVILLE - The Marcellus and Utica shale formations have become known for their untapped reserves of natural gas. The formations also may hold vast amounts of oil - something Chesapeake Energy is learning as it drills in the local area.
The company pumped 44 percent more oil from April to June than it did during the same period in 2012 from its local operations. And more could be on the way.
Chesapeake is the largest leasehold acreage holder in the Marcellus shale, which spans from Northern West Virginia across much of Pennsylvania into southern New York. The company also holds substantial acreage in Ohio's Utica shale.
Steve Dixon, Chesapeake's chief operating officer, said the company should produce 40 million barrels of oil this year. Previous earnings reports indicated the Oklahoma City-based company has been producing oil in both Ohio and Marshall counties.
As companies such as Chesapeake continue drilling wells and pumping gas, the leases signed by Upper Ohio Valley mineral owners will begin to pay off, as landowners will receive checks for leases as high as $6,000 per acre with production royalties of as high as 20 percent.
In the Utica shale, Chesapeake's average daily production of natural gas increased by 48 percent from the first three months of this year to the second quarter of the year. The average Utica well that started producing in the months from April to June yielded about 6.6 million cubic feet of natural gas per day.
In the wet gas portion of the Marcellus shale, Chesapeake's average daily production was about 208 million cubic feet per day, a 56 percent increase from the second quarter of 2012.
During the quarter, Chesapeake reported adjusted net income available to common stockholders of $334 million, which compares to only $3 million in the 2012 second quarter.
Junkins is a staff writer with the Wheeling, W.Va., Intelligencer.