Early results from horizontal drilling in the Utica shale formation in the U.S. Midwest have been encouraging, Andrew Byrne, director of energy equity research at IHS Inc. (IHS:US), said in a news release.
About two-thirds of the horizontal wells drilled in the shale have reported initial production rates of more than 1,000 barrels of oil equivalent a day, he said. More than 135 drilling permits have been granted for Utica horizontal wells, and 11 have been completed with test volumes, he said.
The Utica stretches across several states, including Ohio, New York, Pennsylvania and West Virginia. It sits about 3,000 to 7,000 feet below the Marcellus shale and contains oil, wet gas and dry natural gas.
Early research shows the vast majority of liquids in the Utica are natural gas liquids rather than more valuable crude oil, Byrne said.
“Much of the economic outlook for the play relies upon not only natural gas prices, which remain low, but also prices for natural gas liquids, which have been highly volatile,” Byrne said.
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