A major player in the Utica Shale says natural gas and not oil is the key to domestic energy production, according to a report by Columbus Business First.
Chief executive officer of Magnum Hunter Resources Corp. Gary Evans said that two years ago his company made the choice to sell the majority of its oil assets. In the past two years the company has sold off about $700 million of its crude oil holdings, including a $210 million sale this year.
Evans recently told CNBC that, “We’re really a gas company and that’s where I think the future is for the oil and gas industry in the United States,” which appears to be the right move as oil prices have been in decline. The recent drop in prices has prompted some major operators to slow down drilling operations.
Evans predicts that the low oil prices won’t last, though, because Saudi Arabia can only keep the prices down for so long, he said. Despite the low prices, Magnum Hunter reported a 5.8 percent revenue increase when compared to its third quarter earnings last year. The company currently operates in both the Marcellus and Utica Shale plays, as well as North Dakota’s Bakken formation.
Magnum Hunter has 118,000 acres in the Utica formation, which is comprised of approximately 40 percent wet gas and 60 percent dry gas. After announcing extraordinary production levels from a well tapped into West Virginia’s Utica shale, Magnum Hunter reported with confidence that the Utica is “potentially the best shale play in the U.S.”