The Utica Shale play, long concentrated in Ohio, could be most prolific in West Virginia, according to a new report from Topeka Capital Markets. The report, which culled first-quarter production data from the Ohio Department of Natural Resources, said the play in Ohio was moving south and east toward the Mountain State, where the greatest upside could be in the gas window of the play.
“Based on the data, the most prolific portions of the Utica Shale continue to be in the gassier areas closer to the West Virginia and Pennsylvania borders,” according to the report. Specifically, the core of the dry gas Utica appears to be in Monroe County in Ohio, and Wetzel, Marshall and Tyler counties in West Virginia, according to Topeka. This means West Virginia wells could see initial production rates of 30 to 50 million cubic feet per day (MMcf/d) and estimated ultimate recoveries of 15 to 25 billion cubic feet and higher, according to Topeka.
Topeka reaffirmed its buy rating and $12 price target for Magnum Hunter Resources , which last week acquired mineral rights in Monroe and Wetzel counties for $22.3 million.
“While the details have yet to be released, we believe this is a highly attractive acquisition based on our estimates and current valuations placed on minerals acres,” according to the report.
Citing ODNR data, Topeka found that total first-quarter production volumes were up 52.7% over the previous quarter, with the bulk of production coming from the Utica and Point Pleasant zones. The best Utica well belonged to Magnum Hunter and produced 22.1 MMcf/d over an eight-day period. This was the same well that Magnum Hunter had previously said produced around 15 MMcf/d over 45 days.
Total first-quarter production in Ohio was 79 billion cubic feet equivalent.
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