The Utica had a slower start than the Eagle Ford and Marcellus Shales in gaining industry momentum, partly due to a slowing, grinding economic recovery after the Great Recession. Comparisons with the two plays are only natural: The Utica is similar to the Eagle Ford in having a condensate/wet gas window, and it is in the same neck of the woods as the Marcellus.

The play seems to have kicked into second gear, however, when operators started expanding into other counties in 2013 that previously had not been considered the “core,” although they were in the fairway.

For example, operators increased well completions in 2013 vs. 2012 in Belmont, Guernsey, Mahoning, Trumbull and Washington counties. These counties continue to attract operators such as PDC Energy Inc., Rex Energy Corp. and Hess Corp., which all announced an increase in 2014 capital allocation for the Utica.

Meanwhile, the majority of the core counties—Carroll, Harrison, Monroe and Noble—experienced a decrease in wells coming on production in 2013 versus the year previous. Despite the year-over-year decrease in tie-ins, most of the operators that drill in these counties have also announced increases to their 2014 Utica budgets.

For example, Carrizo Oil & Gas Inc. will increase capital to delineate acreage in the condensate window of Guernsey and Noble counties. Antero Resources, one of the most active drillers in the play, also raised its 2014 Utica allocated capital position in the dry gas position underlying the company’s Marcellus acreage of West Virginia and its core acreage in Ohio's Belmont, Noble and Monroe counties. Chesapeake Energy and Hess are also stepping up their drilling cadence in the Utica.

Given increased activity in the play, Hart Energy Research & Consulting’s analytical team revised its Utica valuation map for the North American Shale Quarterly (NASQ) Service, which is generated from the combination geological base maps illustrated by the formation’s thermal maturity, structure and thickness. The valuation map identifies sweet spots along the high-value fairway extending from the southeastern corner of Washington County and trending northwest into the Ohio-Pennsylvania border area.

The valuation map identifies sweet spots along the high-value fairway extending from the southeast corner of Washington County and trending northwest into the Ohio-Pennsylvania border area. The valuation index is a weighted combination of thermal maturity window, structure and isopach.

Overall, the state of Ohio has reported approximately 1,230 horizontal permits issued since the play’s inception, beginning in 2010. The state’s fourth-quarter 2013 report shows 397 wells within the play, with 352 reporting associated production results, as the remaining wells are waiting on infrastructure tie-in.

Much to the chagrin of operators, infrastructure constraints have proved to be a recurrent theme throughout the Appalachian Basin plays and have not escaped the Utica. Operators have cited numerous bottlenecks that suppressed production in 2013. Chesapeake Energy Corp., the operator with the biggest footprint in the Appalachian Basin, has repeatedly cited infrastructure hookups for missed production targets.

Production is expected to post a marked increase during the first half of 2014, however, as infrastructure buildout allows for the tie-in of many wells that were completed in 2013 and awaiting pipeline connections. For example, the northeastern NGL market has been aided by the startup of the new ATEX and Mariner West pipelines that transport purity ethane to the Gulf Coast and/or Ontario markets.

The opportunity to economically produce vast quantities of liquids-rich natural gas, process those volumes, extract and separate NGL and supply the industry, utility and population centers of the East Coast is unparalleled. As infrastructure delays are lifted and production steadily climbs, the Utica will see increasing demands from both domestic and international markets.

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