The Utica Shale lies in Eastern Ohio and Western Pennsylvania. The specific edges of of the oil producing formation are not known because full scale exploration is just starting to take off. There are big company names holding leases in this area and this location is rumored to be the “most economical shale oil play in the country.” Expect explosive rig counts and development in this area over the next two years. Stay tuned for Utica Shale Play News, Updates, and Information
According to industry experts, the Utica Shale in Ohio has the potential to be the most economical shale oil play in the country. U.S. Rep Bob Gibbs appears to be on the forefront of development and is anxious for the injection of billions of dollars for mass oilfield development. He is planning to hold a hearing before a house committee to have the facts presented about the hydraulic fracturing process and how this process has not been linked to groundwater contamination since it has been used. However, that may soon change.
It is nice to see that a member of Ohio’s delegation is getting ready with “open arms” for full scale oilfield development. Based on my experience in North Dakota, I think his economic impact numbers are grossly undervalued – depending on how big the full scale development turns out to be.
For example, as more oil is produced domestically, more money is invested, and stays in, the United States. What would normally be going to corporations or governments of other countries, is going into the pockets of citizens via jobs, royalties, and other ancillary effects of higher incomes. Take The Bakken. It costs roughly between 6 and 9 Million Dollars to drill and complete a well. Let’s say that Ohio’s wells conservatively cost $5M a piece. If that is the case, and it is developed in a grid pattern similar to the Bakken, that could mean as much as $40M per 1280 acre section if eight wells are drilled per section. That equates to $20M per square mile. This is only the drilling and completion investment folks, it does not even begin to consider the Millions of dollars in oil revenues from royalties and state taxes. The Bakken is estimated to cost approximately $400B to drill out to its full potential over the next 20-30 years. Ohio: if you have what is rumored to be one of the most economical shale plays’ potential, GET READY!
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