The shale boom will probably be confined for now to just a few counties on the eastern and southern side of Ohio, says the state's veteran geologist.
View full sizeA shale drilling rig stands lit in the waning light of day in Carroll County. COLUMBUS - The "sweet spot" in Ohio's Utica shale is turning out to be much smaller than once believed, a veteran state geologist has concluded.
But the production so far from that small area has pushed companies that build gas processing plants into a construction frenzy in an effort to handle the billions cubic feet of gas being produced, according to an executive from a leading "midstream" company building in Ohio.
Larry Wickstrom, the former chief geologist for the Ohio Department of Natural Resources and now in private business, told the 1500 attending the Ohio Oil and Gas Association's annual winter conference on Friday that the most productive wells drilled so far are in a strip that runs from Carroll County in the North to Washington County in the south.
"The real hot spot on the play will be more toward the south than some folks originally thought," he said.
Wickstrom noted that he has assembled privately available data and limited public data for his conclusions, not the final production data for all of 2013 that the Ohio Department of Natural Resources has yet to publish.
Peter MacKenzie, the association's vice president of operations, on Thursday estimated that Ohio gas wells produced more than 203 billion cubic feet of gas in 2013 - more than double the 89.4 billion cubic feet produced in 2012.
On Wickstrom's heels during Friday's presentation came George Francisco, executive vice president and CFO of the Momentum Energy Group, which is one of several companies that have so far built 10 plants to clean and separate oil from gas and then isolate the butane, propane, ethane and other so-called "natural gas liquids" from methane, which is the main gas in natural gas.
Francisco said gas from Ohio's Utica and Pennsylvania's Marcellus shales are turning the nation's northeast region from an importer of gas to an exporter.
Pipelines are being reversed, he said, as midstream companies scramble to find a way to move the glut of gas to distant markets to the south.
He said the region is expected to export 10 billion cubic feet of gas a day, a startling reversal of the 10 billion cubic feet it once imported.
In an interview later, Wickstrom said that the shale under Northeast Ohio is less porous, contains less oil and gas than the rock to the south. Also, the natural pressure in the wells is far less.
What this means, he said, is that with current technology and pricing, northern wells are not economic, generally speaking.
Wickstrom also noted during his presentation that the limited publicly available data shows that the most profitable wells - those which produce primarily oil - are located in an even more narrow strip running north to south.
That corridor also runs from Carroll County in the north, moves south though Harrison County, the western edge of Belmont County, the eastern side of Guernsey and down into Noble County, he said.
Early and limited production data also reveals a potential for prodigious amounts of dry gas through the oil counties as well as in counties east of them toward the Pennsylvania state line, he said. Included in this group are Jefferson, Belmont and Monroe counties.
"There is pretty much a clear dry gas window developing," Wickstrom explained. "So if natural gas prices increase to where things are economic again, there will be some phenomenal dry gas wells in that dry gas window.
Initial production data showed at last one well producing 1.25 billion cubic of gas in less than 90 days, he said. "Some of these wells are monsters."
But the potential has hardly been tapped, he said. And extensive seismic data being created by private companies could show far more potential.
"I think there will be quite a heyday once we can see these structures clearly," Wickstrom said.