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Tue., 10:32am: Gulfport Energy moving south, east in Utica

May 13, 2014
Tribune Chronicle

SALEM - A major investor in the Utica Shale Play said it is moving farther south in Ohio and eastward into West Virginia during its 2014 first quarter earnings call on Friday.

Gulfport Energy Corp. has located most of its oil and gas leases in Belmont and Harrison counties and recently picked up another 8,000 acres, primarily in Belmont County, from Murray Energy Corporation, a privately owned coal company.

Gulfport Energy entered the Utica Shale Play in 2012 and pulled in some big-number wells in Belmont County and currently has about 50 on line, the company said.

The earnings call was recorded and transcribed on the Seeking Alpha website.

It is still in the early stages of developing the play, Gulfport Energy's Chief Operating Officer J. Ross Kirtley said while adding the company has just over 1,000 wells yet to be drilled, completed and tied into the production stream.

Kirtley described how Gulfport Energy has "collected more data than most of our peers" and its ongoing review "... provides the impetus for making improvements in our operations and optimizing the development at this play."

He added, "We believe our early entering to the Utica has placed Gulfport Energy ahead of the learning curve relative to our peers."

One of the overriding goals of oil and gas companies has been in defining the best areas to drill in - locating the so-called sweet spot - and Gulfport said it engineers believe it has obtained "adequate production data to benchmark" that and achieve maximum long-term results in their wells.

In March, Halcon Resources announced suspension of oil and gas drilling operations in the Utica play and on April 28 joint-venture pipeline partners in the Bluegrass Pipeline said they ceased investment in the 1,100-mile line from Pennsylvania to the Gulf of Mexico.

The next day, BP, which opened an office in Mahoning County two years ago, said it is packing up and selling its land.

Halcon holds leases on about 143,000 acres in Pennsylvania and Ohio while BP has 84,000 acres in Ohio.

BP said it planned to take a $521M write-off (1Q) after deciding not to proceed with development in the Utica shale as a consequence of appraisal results. It said it was planning to overhaul its poorly performing shale assets.

"The upstream results include a write-off relating to the Utica acreage," BP said.

On May 9, Gulfport Energy's Vice President of Land, Lester Zitkus, noted the company recently and "quietly began acquiring leasehold in certain portions of the West Virginia panhandle following the Utica shale play across the Ohio River."

Since its last quarterly earning's call, Gulfport Energy has added about 13,000 net acres and currently has approximately 179,000 net acres under lease in the play.

Using methods similar to the outset of the company's Ohio venture, Zitkus explained their geologists "identified target areas for the Utica in West Virginia and developed the tiered outline to focus our acquisition efforts."

Zitkus said the company is disciplined with its leasing activity and keeps it "within graded fairways where we believe the Utica to be most prospective economically as a stand alone play.

"Additionally, when available, we are pursuing both Utica and Marcellus rights for the potential of stock pay opportunities and additional economic upside."

 
 
 

 

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