The Utica Shale contains about 38 trillion cubic feet of undiscovered, technically recoverable natural gas (at the mean estimate) according to the first assessment of this continuous (unconventional) natural gas accumulation by the U. S. Geological Survey.
The Utica Shale has a mean of 940 million barrels of unconventional oil resources and a mean of 9 million barrels of unconventional natural gas liquids.
The Utica Shale lies beneath the Marcellus Shale, and both are part of the Appalachian Basin, which is the longest-producing petroleum province in the United States. The Marcellus Shale, at 84 TCF of natural gas, is the largest unconventional gas basin USGS has assessed. This is followed closely by the Greater Green River Basin in southwestern Wyoming, which has 84 TCF of undiscovered natural gas, of which 82 TCF is continuous (tight gas).
“Understanding our domestic oil and gas resource potential is important, which is why we assess emerging plays like the Utica, as well as areas that have been in production for some time” said Brenda Pierce, USGS Energy Resources Program Coordinator. “Publicly available information about undiscovered oil and gas resources can aid policy makers and resource managers, and inform the debate about resource development.”
The Utica Shale assessment covered areas in Maryland, New York, Ohio, Pennsylvania, Virginia, and West Virginia.
Some shale rock formations, like the Utica and Marcellus, can be source rocks – those formations from which hydrocarbons, such as oil and gas, originate. Conventional oil and gas resources gradually migrate away from the source rock into other formations and traps, whereas continuous resources, such as shale oil and shale gas, remain trapped within the original source rock.
These new estimates are for technically recoverable oil and gas resources, which are those quantities of oil and gas producible using currently available technology and industry practices, regardless of economic or accessibility considerations.
This USGS assessment is an estimate of continuous oil, gas, and natural gas liquid accumulations in the Upper Ordovician Utica Shale of the Appalachian Basin. The estimate of undiscovered oil ranges from 590 million barrels to 1.39 billion barrels (95 percent to 5 percent probability, respectively), natural gas ranges from 21 to 61 TCF (95 percent to 5 percent probability, respectively), and the estimate of natural gas liquids ranges from 4 to 16 million barrels (95 percent to 5 percent probability, respectively).
USGS is the only provider of publicly available estimates of undiscovered technically recoverable oil and gas resources of onshore lands and offshore state waters. The USGS Utica Shale assessment was undertaken as part of a nationwide project assessing domestic petroleum basins using standardized methodology and protocol.
Total announced that its subsidiary, Total E&P USA, has signed and completed on December 30, 2011 an agreement to enter into a Joint Venture with Chesapeake Exploration, a subsidiary of Chesapeake Energy Corporation, and affiliates of its partner EnerVest Ltd.
Yves-Louis Darricarrère, President, Total Exploration & Production, stated “Total is delighted to be building on our technical successes with Chesapeake in the Barnett Shale Joint Venture and to expand into the liquids-rich Utica Shale play in Ohio. This is consistent with our strategy to develop positions in unconventional plays with large potential and, in this case, with value predominantly linked to oil price. This joint venture will provide us with a material position in a valuable long-term resource base under attractive terms and with a top-class operator. Total is conscious of the environmental aspects linked to developing shale acreage and is confident in Chesapeake’s capacity to manage the Utica shale operations in a responsible manner, respecting the highest industry standards. ”
The transaction is effective as of November 1, 2011. Total has paid Chesapeake and EnerVest about USD 700 million in cash for acquiring these assets. Total will also be committed to pay additional amounts up to USD 1.63 billion over a maximum period of 7 years in the form of a 60% carry of Chesapeake and EnerVest’s future capital expenditures on drilling and completion of wells within the Joint Venture.
The Joint Venture covers approximately 619,000 net acres, of which 542,000 net acres are brought by Chesapeake and 77,000 net acres are brought by EnerVest. Total will acquire its 25% share from each of Chesapeake and EnerVest on identical terms, giving a total of 155,000 net acres. Chesapeake will operate the Joint Venture acreage.
As a result of the transaction, Total will also acquire a 25% share in any new acreage which will be acquired by Chesapeake in the liquids-rich area of the Utica shale play.
To date 13 wells have been drilled across the acreage with very promising results seen from each well in terms of productivity and liquid content. The Joint Venture plans to ramp up the drilling activities in the coming 3 years with 25 rigs planned to be mobilized by 2014 to fully appraise and develop the acreage. SEC production in Total’s share is expected to reach 100,000 barrels of oil equivalent per day by the end of the decade.
Additionally, Total, Chesapeake and EnerVest have agreed to jointly develop the construction of the necessary midstream facilities to export the production from this acreage.
- Who Is Chesapeake’s ‘Undisclosed’ Partner for Utica Shale JV? (forbes.com)
- Total enters shale-energy venture with Chesapeake (marketwatch.com)
- Stocks to Watch: Chesapeake, BP, Halliburton (thestreet.com)
- New Frontiers: the attention turns to some up-and-coming plays (mb50.wordpress.com)
- Total Said to Consider Chesapeake’s $2.14 Billion Ohio Shale (businessweek.com)