Gulfport Energy Corp. has big plans for Ohio’s Utica shale.
The Oklahoma energy company said Wednesday that it intends to add four drilling rigs in eastern Ohio by the end of June and expects to invest $500 million in Ohio in 2013 to drill up to 60 wells.
Earlier, the company had said it planned to spend up to $400 million to drill 50 Utica wells in 2013. It has three rigs working in Ohio.
“Based on our early production results from the six new wells we’ve hooked up, we feel now is the time to accelerate our drilling,” CEO James Palm said in a teleconference on the company’s first quarter 2013 report on finances and operations.
The company has been delayed in getting wells into production as it awaited the building of natural gas-processing plants and construction of a pipeline system, he said.
“We think we’re there now,” he said of overcoming those problems.
Most of the new drilling in Ohio will be close to newly built gas-gathering pipelines to avoid additional delays, he said.
Gulfport has nine Ohio wells that are in production and they are some of the biggest producing wells in the state.
The nine wells are producing more than 10,000 barrels of oil equivalents per day, and that has Gulfport officials enthused, Palm said.
Four additional wells should be producing by mid-June, he said.
In the first three months of 2013, Gulfport drilled 10 new Ohio wells: one is awaiting completion, three are being drilled by horizontal rigs, five had vertical legs completed and one vertical leg is being drilled.
The company said it has made “a quantum leap” in Ohio in the last 12 months, Palm said.
A year ago, Gulfport had two drilling rigs in Ohio and had drilled three wells and had just signed a collection agreement with MarkWest Energy Partners.
Today, Gulfport has drilled or is drilling 27 Ohio wells, delineated more than 85 percent of its acreage and is producing more than 50 million cubic feet of natural gas per day to market, he said.
Gulfport also released first-time data on four additional Ohio wells.
The Lyon 1-27H well in Harrison County’s Washington Township is producing 2.5 million cubic feet of natural gas, plus 1,087 barrels of oil and 337 barrels of natural gas liquids.
The adjoining Lyon 2-27H well is producing 1.8 million cubic feet of natural gas per day, plus 1,373 barrels of oil and 144 barrels of natural gas liquids (butane or propane).
The Stout 1-28H well in Harrison County’s Mooresfield Township is daily producing 4.2 million cubic feet of natural gas plus 443 barrels of oil and 517 barrels of natural gas liquids.
The adjoining Stout 2-28H well is producing 3.3 million cubic feet of natural gas per day, plus 413 barrels of oil and 443 barrels of natural gas liquids.
The results from those wells was encouraging to analyst Tom Rezvan of New York’s Sterne Agee.
The four wells produced “strong well results that further de-risk the Utica’s condensate [oil] fairway,” he said.
Palm said Gulfport is pleased that initial production numbers are comparable to what the wells produced during early tests.
Gulfport Energy has 128,000 leased acres in Ohio, mostly in Harrison, Belmont and Guernsey counties.
Bob Downing can be reached at 330-996-3745 or bdowning@thebeaconjournal.com.