The Utica shale might be on the fast track to development compared to other North American shale plays in the past, but the lack of available data and midstream infrastructure has some people raising concerns about the play’s viability.

According to Hsulin Peng, senior analyst of exploration and production at Robert W. Baird & Co., and Christopher Simon, managing director, co-head of acquisitions and divestitures (A&D) at Raymond James, these concerns are overblown. While speaking during Hart Energy’s DUG East conference in Pittsburgh, Simon noted that the Utica is in its early stages and thus far there have been impressive rates in the rich window of the play.

However, many shale plays follow similar phases along with improvements learned from each previous play along with improvements in technology. These phases follow a trend in which producers find the most economically viable and productive portions and contract drilling to the newfound core. “These production boundaries are done through acreage pooling and trading, HBP [held by production] drilling, A&D transactions and eventually full development PADD drilling,” he said.

According to Simon, the Utica shale is on a similar pace as the Eagle Ford as it has a similar trajectory with 292 wells that were in production in 2012, which is expected to grow to nearly 400 wells in 2013. Additionally, the rig count has more than doubled in 2013 to 37 rigs from 14 rigs in 2012.

Peng said that the midstream infrastructure is expected to remain fluid as the sector plays catch-up. This is similar to how midstream build-out has occurred in other shale plays, especially the Marcellus, which has been built from the ground up.

“When there is money to be made, companies will show up, similar to the Marcellus shale. We think investor fear over the lack of midstream infrastructure is overstated, at least in the medium term. We are in the very early days of the play, and there is much more to come,” she said.

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