Exploration in the Ordovician Utica shale has been ongoing for several years in the Canadian province of Quebec, and a few wells have probed the zone in southeastern New York. Now, the Utica's prospects on the western side of the Appalachian Basin are getting a fresh look.

In November 2009, mega-shale explorer Chesapeake Energy Corp. announced that it had acquired Appalachian assets worth $850 million from private firm Anschutz Exploration. The 500,000-acre purchase appears prospective for the Utica, in addition to the better-known Devonian-age Marcellus shale.

Oklahoma City-based Chesapeake is also pursuing grass-roots acreage. Landmen are leasing in Ohio for Buckeye Energy LLC, a Chesapeake affiliate, and field reports indicate that bonuses of up to $2,000 an acre have been paid, said Calgary-based Ross Smith Energy Group in a recent report.

The Utica fairway, should it develop, will likely lie to the west of the Marcellus fairway. That's because the Utica occurs several thousand feet below the Marcellus. The optimum depth range for shale production is considered to be between 6,000 and 13,000 feet, so the areas of prime potential for each will shingle with dip.

Geologically, the shale appears to have the characteristics necessary for commercial production, says Manuj Nikhanj, Ross Smith vice president. The Utica ranges from 150 feet thick in western New York to up to 230 feet in eastern Ohio; far to the east in the basin the section can reach 700 feet.

Its organic composition is also favorable: "Regionally, the Utica has enough total organic carbon (TOC) to generate commercial quantities of oil and gas," says Nikhanj. Most areas show values of 1% to 3% Ro.

At present, the Utica looks particularly intriguing in western Pennsylvania, eastern Ohio, the panhandle of northern West Virginia and western New York. The shale grades from dry gas in its eastern extent to wet gas and oil on its western side, and interest is high in the liquids-rich slice.

Early drilling results are already teasing explorers. Fort Worth-based Range Resources Corp. recently drilled a successful horizontal Utica test in Butler County, Pennsylvania. It has not released details, although it has said publically that it is happy with its results. Field rumors say the well has flowed gas at rates as high as 9 million cubic feet a day. Of its 1.3 million acres in the Keystone State, Range says about 600,000 acres are in the southwest portion where the Utica is prospective.

Additionally, Pittsburgh-based Consol Energy Inc. recently drilled an unstimulated vertical in Belmont County, Ohio, that tested at 1.5 million cubic feet per day. The company said it had more than 70,000 acres around the discovery well, and it would shift some of its exploration capital to the Utica in 2011.

Range plans a horizontal Utica test in Beaver County, located between Butler County and the Ohio border. The company's #1H John R. McCoy Unit is some five miles south of Shippingport, and is projected to 14,837 feet, according to IHS Inc.

In mid-November 2010, Chesapeake also pulled a permit for a horizontal Utica test in Beaver County. The site for its 14,776-foot #3H David Thompson is about five miles north of the town of Ohioville.

East Resources, which was purchased by Shell in May 2010, has its own plans in Lawrence County, Pennsylvania, which abuts both Beaver and Butler counties. Its #1 McKinney Unit is projected to 13,097 feet in Utica.

Atlas Energy, which is set to be acquired by Chevron Corp., has also mentioned it will look at the shale. Atlas has 630,000 net prospective acres, and prior to the announcement of its purchase, had planned three horizontal tests to the Utica. EQT Corp., another veteran Appalachian operator, is interested as well. The company has done some drilling in the shale during the past few years, but has not revealed much about its results.

Furthermore, EnerVest Ltd. and master limited partnership EV Energy Partners, based in Houston, have pointed out their Utica potential to investors. Together, the firms hold 1.6 million acres in Ohio.

As in other emerging plays, it will take wells in the ground to prove up the Utica. "There are still a lot of unknowns that pose risk to commercial development at this time," says Nikhanj.

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