Things are happening in the Utica Shale.
A new study predicts oil and natural gas producers will spend $34 billion in Ohio on exploration and development, pipelines, royalties to landowners and other leasing expenses over the next five years and that more than 204,000 jobs will be created or supported by development activity. Rigzone reports that Chesapeake Energy’s Aubrey McClendon told a recent forum that Ohio’s Utica drilling boom could be the “biggest thing to happen in the state economically since the plow.”
Utica is the 170,000-square-mile shale formation that lies beneath parts of eight states and Canada, with some of the richest deposits of oil and natural gas believed to be in eastern Ohio. It might not be as well known as the Marcellus Shale, the subterranean neighbor that’s supporting an economic boom in Pennsylvania, but that may change.
Chesapeake announced results this week from horizontal well drilling in the wet gas and dry gas phases of the Utica in eastern Ohio and western Pennsylvania, where the company holds 1.25 million net acres of leases. The 12 wells have yielded strong results, the company said. McClendon:
“We estimate the company's leasehold covers approximately 40% of the potentially drillable acres in the core of the play. The company is targeting a development program with average drilling and completion costs of approximately $5.0 - $6.0 million per well. Chesapeake is currently drilling with five operated rigs in the Utica Shale play and plans to increase its operated rigs up to 10 rigs by year-end 2011, up to 20 rigs by year-end 2012 and up to 40 rigs by year-end 2014.”
That kind of activity is the apparent basis for a study commissioned by the Ohio Oil and Gas Energy Education Program that shows robust job and economic growth coming from the Utica play:
- Job growth starting relatively slowly with 4,614 positions this year and 22,297 next year before culminating at an estimated 204,520 jobs by 2015.
- An estimated $12 billion per year in wages, salaries and personal income, including $1.6 billion in royalties.
- More than $475 million in annual tax revenues, including income, property, commercial activity and severance taxes or royalties tied to production by 2015.