According to a report by GlobalData, some of the United States’ biggest oil and gas companies are losing interest in the Antrim shale.
The report also said that “in recent years natural gas production from the shale has been decreasing while a national overabundance has led to a decline in gas prices, thereby largely impacting investor interest in the shale.”
In 2008, area production was 131 billion cubic feet but has declined steadily to about 85 billion cubic feet in 2011. By 2020, GlobalData predicts this figure will continue to fall and stabilize at approximately 62 billion cubic feet.
“As a result of the shale’s maturation, major oil and gas firms have divested their stakes and moved to acquire resources in newer shale plays with greater potential. From a total of 1,446 in 2006, the number of permits issued for Antrim shale development dropped dramatically in 2011 to just 43, as major oil and gas players have increasingly redirected capital expenditure to more promising locations such as the Barnett, Bakken, Marcellus, Niobrara and Haynesville,” according to the report.
Two of the top 10 Antrim shale interests, Linn Operating Inc. and Chevron (Michigan), have increased gas production since 2010 -- 13.9 billion cubic feet for Linn and 8.3 billion cubic feet for Chevron.
“Although neither company had gas-development projects in the shale previous to 2010, in February of last year Chevron entered in the Antrim shale and has since marked its presence in the play with the acquisition of Atlas Energy Inc.”
Other major Antrim shale gas producers such as Terra Energy Corp., Ward Lake Energy and Muskegon Development Co. have steadily decreased their gas production from the play during the last few years.
In 2010, Linn Operating paid $330 million to HighMount Exploration & Production LLC for Antrim shale properties in northern Michigan. Linn Energy acquired assets that produced 30 million cubic feet of gas per day. Proved reserves on the properties totaled 266 billion cubic feet of gas equivalent, with 85% proved developed reserves. In addition to acquiring 1,350 operated wells, Linn obtained approximately 300 proved low-risk drilling and optimization opportunities.
Although the Antrim shale has produced gas since the 1940s, the play was not active until the late 1980s. During the 1990s, the Antrim became the most actively drilled shale gas play in the U.S. with thousands of wells drilled.
The Antrim cuts across the northern lower peninsula of Michigan with initial production and focuses on Otsego County and additional production from all of Antrim and Montmorency counties and northern Kalkaska, Crawford and Oscoda counties. Production from the Antrim has been reported as far as Alpena and Alcona counties in the east.
A 2008 report by the Energy Information Administration put recoverable resources from the Antrim at about 10.6 trillion cubic feet. It ranked the play as the 13th largest U.S. gas field in 2009. Wells produce from depths as shallow as 350 to just over 3,000 feet, although the majority of wells are completed from 1,000 to 2,500 feet deep. Wells are fractured with water and sand and some wells are fractured using nitrogen or foam. Horizontal completions are fairly new, but are currently only a small percentage of total well count.
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