Major players investing in the Utica Shale
Chesapeake Energy and American Energy Partners aren’t alone in the Utica Shale. There are other major players investing in the shale.
Antero Resources (AR) has 115,000 net acres in eastern Ohio’s Utica Shale. The company has drilled and completed 28 horizontal Utica Shale wells, with three online and eight awaiting start-up. Estimated net production for 1Q14 was 79 millions of cubic feet equivalent (or MMcfe) per day, including 5,200 barrels per day of liquids. As of June, 2014, the company had 5.8 trillion cubic feet equivalent of reserves in the play. Antero is currently operating five drilling rigs in Ohio.
CONSOL Energy (or CNX) and Hess Corp. (or HES) operate a joint venture in the Utica Shale. In total, the joint venture covers 68,488 acres in the core area—40,592 acres net to CONSOL. For 2013, CONSOL had 0.1 trillion cubic feet of proved reserves in 45 proved locations. The total carry amount of the joint venture is $335 million, of which $208 million remains as of the end of 1Q14. CONSOL expects 270% growth in volumes produced in Utica through 2016. Utica is currently focusing on developing dry acreage in Pennsylvania and western Virginia. In 2014, the company plans to spend $105 million capex on Utica.
Below are some of the investments and acquisitions that were recently made by American Energy Partners.
June, 2014: American Energy, also referred to as Utica LLC (or AEU), is an affiliate of American Energy Partners L.P. AEU signed agreements to acquire ~27,000 net acres of leasehold in Monroe County, Ohio, from East Resources Inc. and a private company. Net production from these assets is expected to be ~40 million cubic feet of natural gas equivalent per day.
February, 2014: AEU signed agreements to acquire approximately 130,000 net acres in the southern Utica Shale play from affiliates of Hess Corporation (or HES), ExxonMobil Corporation (or XOM) and privately-held Paloma Partners LLC. These acquisitions would take American Energy’s southern Utica Shale holdings to ~260,000 net acres. Also, in February, American Energy Partners raised $750 million debt to fund acquisitions and capex in the southern Utica Shale.
October, 2013: AEU raised ~$1.7 billion to pursue a business plan focused on the Utica Shale play in eastern Ohio. Proceeds from the financing would be used to fund ~ 105,000 net acres of leasehold in the southern portion of the Utica Shale, to finance drilling operations on this acreage, and to acquire and develop additional acreage in the Utica Shale. AEU expressed plans to increase drilling activity to at least 12 rigs over the next two to three years.
Higher oil production in the Utica Shale will benefit the companies engaged in production in the area. Some of the major players who are actively drilling, exploring, and producing oil in the Utica Shale include Chesapeake Energy (CHK), Antero Resources (AR), CONSOL Energy (CNX), and EV Energy Partners (or EVEP), among others. Some of these companies are components of the Energy Select Sector SPDR (XLE) and the SPDR S&P Oil & Gas Exploration & Production (XOP).