Oil and gas drilling in the northeast is often synonymous with the Marcellus shale formation, but the Utica is coming out from behind its shadow with promises of exponential growth, according to a report by OilPrice.com.
Since January 2012, production in the Utica has risen from 155 million cubic feet per day to roughly 1.3 billion cubic feet per day, with production per rig steadily increasing as well. Former Chesapeake Energy CEO Aubrey McClendon hailed the formation as being the “biggest thing to hit Ohio since maybe the plow,” and is “pound for pound, the best gas rock in the U.S.” About a dozen producers, including Shell, Consol and Chevron, are vying to add acreage in the region.
The Utica formation lies beneath the Marcellus, extending north and west. The formation is on average 300 feet thicker than the shale found in the Marcellus, and is also more porous. The rock is around 100 million years older than the Marcellus and is about 3,000 to 7,000 feet deeper, depending on the location. Although the total organic carbon is generally lower than what is found in Marcellus shale, the hydrocarbons are estimated to be more pressurized, which could result in better production.
The greater depth of the formation, however, leads to dramatically higher drilling costs. To help combat the higher cost, Utica producers are utilizing the surface infrastructure such as roads and well pads that were built to support Marcellus production. Despite the available infrastructure, drilling costs remain about three times higher than the cost of drilling in the Marcellus.