1 / 21

Shale Development Update

This update provides information on shale production numbers, the progression of shale development in Ohio, infrastructure development, and the challenges faced in moving production further west. It also discusses natural gas gathering, processing, and fractionation, midstream infrastructure, downstream industry growth, and observations on the current state of the industry.

harrisonn
Download Presentation

Shale Development Update

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Shale Development Update • Cindy Bond, OSU Extension Educator, Community Development, Guernsey Co. • Mike Lloyd, OSU Extension Educator, Community Development, Noble County • Guernsey Co. • February 7, 2014 • Zane State • Cambridge, OH

  2. 2012 Shale Production Numbers OIL PRODUCTION 635,896 BARRELS NATURAL GAS PRODUCTION 12,836,662 MCF http://oilandgas.ohiodnr.gov/production

  3. A Progression • Leasing: 2009 - 2010 • Permitting: 2011 • Drilling: 2012 • Production: 2013 – Ongoing • Infrastructure Development • Pipelines • Processing plants

  4. Shale – Permitted, Drilled (1/24/14, ODNR) • Utica Shale: • Permitted: 1061 • Drilled: 697 • Producing: 251 • Rig count: 40 • Marcellus Shale: • Permitted: 34 • Drilled: 18 • Producing: 6 • Rig count: 1 *Totals since 2010.

  5. Utica Shale Play in Ohio

  6. PDC Stiers Rig (Guernsey Co.)

  7. Why is production not moving further west? -Much of Eastern Ohio is in the “wet gas” area and that is the primary current focus. -Further west the Utica has oil (too far west, the shale becomes “immature” and not suitable for production). As the shale moves west, it gets more shallow and thinner and has less pressure. There are issues of extracting oil when the pressure is too low, technology will likely be developed. -Companies need to drill to hold current leases before they expire in Eastern Ohio. -Foreign investment has declined with the lower gas prices. -Infrastructure needs to be developed to move current product.

  8. Third Quarter 2013 Production • Highest producing oil well: Gulfport Energy “Boy Scout” well in Harrison Co., 41,617 bbl. Oil in 70 days (595 bbl/day) • Highest producing gas well: Gulfport Energy “Stutzman” well in Belmont Co. 1,249,739 Mcf in 89 days of production (14,042 Mcf/day)

  9. Comparing Production

  10. Natural Gas Gathering Processing and Fractionation Midstream – Natural Gas Processing and Fractionation • Separating natural gas “liquids” into its component fuels (pentane, propane, ethane, butane, natural gasoline) • Utica – A blessing and a Challenge…..? Blessing – Natural Gas Liquids (NGL) “rich” Challenge – NGL “rich” gas needs processing before use or transmission • Total Investment: Estimated 8+Billion

  11. Midstream Infrastructure

  12. Midstream Map 14

  13. Size of these facilities • Scio plant, 650-1200 acres • $300,000/ month in electric • 180 rail cars/day • 900 workers during construction, 50-60 post construction • Kensington plant, 5 million/ month electric bill

  14. Downstream/Industry Growth Downstream • Chemicals and polymer products – Ethane, plastics, etc. • Electric generation – Baseload gas generation and peaking generation • Agribusiness opportunities - Fertilizer • Cogeneration – Waste Heat and Natural gas heat capture electric generation • Equipment makers and suppliers – Promote Ohio’s strong ability to manufacture Industry Services • V&M Star (Mahoning Co.) • Baker Hughes (Stark Co.) • Exterran (Mahoning Co.) • Select Energy Services (Carroll Co.) • Halliburton (Muskingum Co.) • Existing Ohio companies: Ariel, Gorman Rupp, Miller Supply, Timken, US Steel

  15. Observations • Fewer rigs, bigger & better wells drilled faster • U.S. is the world’s largest producer of oil & gas, passing Russia (10/23/13 WSJ) • China overtaking U.S. as #1 buyer of oil from OPEC • U.S. refiner exports all time high, cannot export crude (10/9/13 WSJ) • Foreign investment in the U.S. energy boom decreasing (1/2/14 WSJ)

  16. Observations • Issues with transporting product safely • Pipeline cracks and rail car accidents • Some issues of illegal disposal/processing of fluids • Tremors and production • 600,000 barrels of oil + other fluids being removed in Eagle Ford daily, some settling occurring (8/27/13 WSJ) • If approached for a pipeline, be specific on what it is for, how big, how wide will the right-of-way be, reseeding during the right time of the year • Get paid on the gross, not net (“bad stories” on gathering expenses9/12/13 F&D)

  17. Observations • Over 15 million people live w/in a mile of a well that has been drilled since 1990 • With this growth in drilling, many areas are changing, more industrialization • Traffic, lights, noise for a period of time • Some are working on the balance between the irritation of living near a well and the benefits they bring • Preserve quality of life, protect the environment and help the economy

  18. Carroll County, 2012 vs. 2013

More Related