Pittsburgh—Mergers and acquisitions activity in the Utica Shale appears to be cooling off for the time being, said Tim Rezvan, senior research analyst at Sterne Agee.

The Utica has been a hotbed of deal activity for the past several years with land going anywhere between $10,000 to $15,000 per acre. Rezvan said he doesn’t expect to see any other large-scale acquisitions in the play for a couple of years until the first wave of exploration passes through.

“The industry remains in the earliest stages of actually delineating what we believe is a prolific hydrocarbon reservoir that extends from eastern Ohio all the way out to West Virginia and possibly western Pennsylvania,” he said during Hart Energy’s DUG East conference on June 5.

The Utica didn’t even hit investor radar screens until around 2010, he said, when Chesapeake Energy Corp. (NYSE: CHK) and Gulfport Energy Corp. (NASDAQ: GPOR) made splashy entrances into the play by buying large acreage positions in Ohio.

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Unless you’re a fan of the Ohio State Buckeyes or bad 1980s sitcoms, you really weren’t focused on this state at all,” he said.

However, since then, several independent exploration and production (E&P) companies piled into the play that contains about 38 trillion cubic feet of gas in estimated recoverable resources. Notably, American Energy Partners LP, Aubrey McClendon’s new venture, has been active in several recent Utica deals. The company's leasehold in the play is currently at 280,000 net acres—the largest in the industry.

Ohio now has 31 operators with permitted wells across 15 counties. However, operators are being forced to hold back on running more aggressive rig programs, he said.

“It’s important to note there are some very clear headwinds facing the industry,” he said.

Well costs remain high, he said, giving few operators the ability to run path-focused development programs. Chesapeake has been the one operator that has consistently been drilling wells costing more than $10 million, he said.

Additionally, the instability in gas prices has led to an increasingly gassy skew of production in lockstep with gas-price rally. Rezvan said there is now worry that production will not be able to refill storage by winter.

“There’s a lot of uncertainty about what’s going to happen over the next 12 months in gas land,” he said.

Lastly, natural gas processing and takeaway constraints will remain a concern for the region until 2016. Rezvan, though, is optimistic.

"It’s important to note, 2016 is 18 months away," he said. "I think we need to be patient in getting toward 2016, get some more data points in the play, and then I think we’ll see consolidation accelerate."