Extending the Utica

Tucked into the orange and yellow hills of Ohio, several miles down a winding gravel road and overlooking a fish farm at the southern edge of Harrison County, the Wagner 1-28H nonchalantly produces a steady stream of wet Utica shale gas to sales. Wagner, put online in early August, came online as the highest announced producing Utica well on a 24-hour test, at 4,650 barrels of oil equivalent per day—50% liquids—calculated assuming full recovery of natural gas liquids pending infrastructure.

Vertical, solar-powered sand tanks to minimize the pad site footprint await the initial pumping of Gulfport Energy Corp.’s Clay #1-4H well in Harrison County, Ohio, in October.

While restricted now, Gulfport Energy Corp. reported the initial gas rate from the well at 17 million cubic feet (MMcf) of gas per day saturated with 1,200 Btu, but field reports suggest the actual number would have been higher if not choked. Much higher. Add to that another 432 barrels of condensate and an estimated 1,880 barrels of gas liquids to drive revenue, and you get an idea why the Utica shale has become the darling of the industry.

Global Hunter Securities analyst Curtis Trimble said in a research note following the announcement that the Wagner "has become one of the most prolific wells seen in the play to date," indicating "the real potential this play may exhibit in a few years' time." He added the Wagner may eventually fall on the low end of wet-gas results.

As the play moves west from the epicenter, EV Energy Partners senior vice president of acquisitions Ron Gajdica believes the Utica volatile oil window “is going to be a bonanza.”

The Wagner is what every Utica producer hopes for in this nascent play. But data flow has been limited, exacerbated by a combination of annual-only reporting requirements in Ohio and a post-completion practice of "soaking" wells for months prior to production.

Nonetheless, permitting and drilling activity reveal enthusiasm and targets. As of October 5, 25 rigs were plying the play, according to the Baker Hughes rig count, a 73% increase year over year. Since 2010 and through September, some 382 Utica horizontal wells have been permitted and 144 wells drilled or are drilling. Even though announced results are sparse, a deluge of results are anticipated come year-end and early in 2013.

In October, the U.S. Geological Survey released estimated reserves of the Ordovician-age Utica shale and related Point Pleasant formations throughout Appalachia of 940 million barrels of oil, 38 trillion cubic feet of gas and 208 million barrels of natural gas liquids (NGLs). According to estimates by the Ohio Department of Natural Resources, the state has 1.3 billion to 5.5 billion barrels of oil recoverable potential, and 3.8 trillion to 15.7 trillion cubic feet of natural gas.

"The Utica is obviously the hottest play in America today," Chesapeake Energy Corp. chief executive Aubrey McClendon, far and away the leading operator in the play, said at a recent investor conference. The target is rich where it can be made economic.

The Utica shale horizontal rig count illustrates heightened activity, with 25 rigs currently on the ground, up 11 year-over-year.

Epicenter at Carroll

Oft compared to the Eagle Ford shale in South Texas, the Utica similarly is mapped with a southwest-to-northeast rainbow of arched commodity-phase windows, with dry gas predominant on the eastern side of the play in Ohio and into Pennsylvania, trending to black oil going west. A graduated rich mix of gas and liquids, condensate and light oil fill the middle as depth and thermal maturity lessen westward.

"There is a sweet spot in the middle where most of the industry activity is taking place," says Ron Gajdica, senior vice president of acquisitions for Houston-based EV Energy Partners, part of the EnerVest Ltd. family. EnerVest and EV Energy are large Utica acreage holders and partners with Chesapeake in the play.

Until Gulfport Energy Corp. reported its Shugert 1-1H well in Belmont County, Ohio, just before press time, the wet-gas Wagner 1-28H in Harrison County, with an 8,100-foot lateral that reached total depth in Belmont County, held the Utica shale record for initial production at 4,650 barrels of oil equivalent.

Chesapeake, with a dominant 1.3 million net acres, launched open season on the Utica in September 2011 with its Buell well in Harrison County, Ohio, on the eastern flank of the wet-gas band, with an estimated flow rate of 3,500 barrels of oil equivalent (BOE) per day (assuming full NGL recovery once processing and fractionation capacity become available). By the end of second-quarter 2012, Chesapeake had drilled 87 wells in the play, largely in the wet-gas trend, of which 28 have production information. Average peak rates are over 1,000 BOE per day. Another 28 are waiting on pipeline connection or completing. Lateral lengths average slightly over 5,000 feet.

The epicenter of Chesapeake's activity is in Carroll and Columbiana counties, partially because of available infrastructure to move product—a problem elsewhere—and partly because maps of the geochemistry place the sweet spot for ultimate recovery smack dab here as well. Bill Von Gonten, owner of reservoir-modeling consulting company W.D. Von Gonten & Co., drew the map. "The best wells are going to be drilled in these areas of highest permeability, thickness, pressure and lowest viscosity," he says. "That's in the retrograde gas phase."

While industry announcements have been limited, Enervest Ltd. executive vice president and chief operating officer Mark Houser says the pace of derisking the Utica rivals other early plays.

"Carroll and Columbiana counties are tough to beat," said Chesapeake's McClendon. Most active operators consider the wet-gas window here essentially derisked.

"Based on our initial production (IP) results, we especially like what we see on the wet-gas side," Chesapeake senior vice president of geosciences John Kapchinske told Oil and Gas Investor. "We expect the Utica to be a strong liquids producer overall." For now, he says, the focus remains in Carroll, Columbiana and Harrison counties, tied to Chesapeake's drilling carry with French major Total SA in a wet-gas area of mutual interest. The combo plans to drill 150 additional net wells in 2013.

Meeting in the middle

For EnerVest, a Houston-based privately held E&P funded by institutional investors, Ohio is like a second home. The company and its institutional partnerships, along with its publicly held master limited partnership EV Energy Partners, is the state's largest operator by production and well count, with some 8,000 producing conventional wells. And when an opportunity like the Utica shale blossoms between its deeper Knox and shallower Clinton and Medina formation activity in eastern Ohio, it's not timid in making the most of the upside.

EnerVest companies hold 1.2 million gross and 770,000 net acres across the Utica play, of which EV Energy Partners owns 150,000 net. Although it controls 60% of its total, an interesting piece from an activity perspective involves 57,000 net nonoperated acres as part of a partnership with Total and Chesapeake. Of 114 Chesapeake wells drilled or drilling, EnerVest has participation in 58, making it a first-hand observer of the cutting-edge results in the heart of the play.

Wells drilled or drilling through the end of September show operator interest up and down the wet-gas and volatile oil bands of the play.

"We're starting to see good results come out now," says Mark Houser, EnerVest executive vice president and chief operating officer, and president and chief executive of EV Energy. "The pace of activity is strong relative to other plays in the early days. The pace of derisking rivals any other shale play." Stark and Carroll counties "have certainly been derisked," he says, with Columbiana County following closely behind.

Of Chesapeake's 14 rigs running, EnerVest has working interest in five, as well as interest in 18 wells presently producing. "We've seen the Chesapeake plans for next year, and there is going to be a strong pace of drilling." Chesapeake plans to increase to 30 rigs by the end of 2014.

Discussions over the past year have glorified the Point Pleasant formation almost to the exclusion of any respect for the Utica itself, but the goal, he says, is to produce from both zones. And while the Point Pleasant does have a slight geologic advantage, "even if the Point Pleasant were not there, the Utica shale would be an interesting development target on its own," Gajdica says.

Atypical EnerVest and Chesapeake completion involves a 5,000-foot lateral, which could increase with new pooling and unitization rulings, and 10 to 20 hydraulic-fracture stages at 300 to 400 feet per stage. Fluids pumped into the formation, however, "are all over the map. Many different completion techniques are being tried. There's no standard yet."

Utica horizontal wells are now being routinely drilled in 15 days from spud to total depth. In development mode, Houser expects each pad will have an additional six to nine wells. Chesapeake well AFEs are slightly above $6 million.

EnerVest has drilled one operated wet-gas well, the Cairns 5H, in Carroll County near the Tuscarawas County border. After resting for 80 days, it came on production in mid-August flowing 1,690 BOE in a 24-hour test, made up of 729 barrels of 52-degree API oil, 2.2 million cubic feet of dry gas and 587 barrels of gas liquids. With 78% liquids content, it was much higher than the 58% industry average, according to Raymond James & Associates.

Autumn colors of the Allegheny Plateau frame Utica shale drilling in eastern Ohio.

Cairns was drilled with a 5,400-foot lateral with 19 stages fraced. "The Cairns well has the best IP of any well drilled in Carroll County to date," says Gajdica. "It's a great well. It's located in the western part of the wet-gas window, which is the best part. We continue to be pleased with its results."

EnerVest currently has two asset packages for sale, approximately 550,000 operated and nonoperated net acres in the wet-gas and volatile-oil portions of the play where the industry is active. It anticipates closing at least the operated package by year-end.

Riding the line

Privately held Sierra Resources LLC, a Den-ham Capital-backed portfolio company, is laying it all on the wet-gas/condensate line here in this central region of the Utica. The Houston-based company, which is preparing to drill its first horizontal Utica well in December, has amassed some 75,000 acres in Harrison, Tuscarawas, Carroll, Columbiana, Mahoning and Guernsey counties in Ohio.

Originally formed in 1992, Sierra was initially successful in the South Texas Vicksburg trend, but it was a more recent focus on the Trenton-Black River formation that put Sierra in position for the Utica. The company underwrote an extensive geochemical analysis of cuttings from more than 100 wells in eastern Ohio, conducted by GeoMark. Combined with a geological study, "That made the project a go," says Sierra president John Eads.

Following an exit last year from the Eagle Ford shale, and with gas prices dampening near-term enthusiasm for the Trenton-Black River, says Eads, "We're strictly focused on the Utica."

The epicenter of its geologic and geochemistry analysis pointed to Stark, Carroll, Harrison, Columbiana and Tuscarawas counties, he says, with most of Sierra's acreage concentrated in Tuscarawas.

Sierra drilled and cored the Point Pleasant formation in two wells there in 2011, which "confirmed our previous work and gave us great encouragement in terms of the porosity and permeabilities we are seeing in that series. Both cores confirmed that was a good spot to be."

Sierra's first horizontal well, scheduled to spud December 1 in Tuscarawas County, will have a vertical depth of 6,000 feet and a lateral between 5,300 and 6,300 feet within the Point Pleasant trend, which is about 150 feet thick here. "We're planning that all of our wells will target the Point Pleasant," he notes, but the stimulation will be designed to penetrate the Utica member above. "We think the Utica will make a significant contribution."

Sierra will rest the well for 90 days following completion, possibly testing the last stage before shutting in. With those results in hand, and budgeting $6 million to $8 million per well, which is consistent with other operators in the area, Eads anticipates the 2013 drilling program will be "very active," possibly deploying two rigs by year-end.

In contrast to plays such as the Eagle Ford, where large ranches are the norm, putting a unit together in the Utica can be more time consuming. "We typically thrive in more complicated land situations such as this," Eads says.

Pushing boundaries

Capital constraints have kept Chesapeake from pushing the areal scope too far beyond its area of mutual interest with Total, but other operators are eager to fill the void beyond the play's early sweet spot. Moving south, the wet-gas phase is looking pretty sweet there as well, with promising data points through Harrison, Guernsey, Belmont, Noble and Monroe counties and possibly, even the northern tier of Washington.

Privately held Sierra Resources LLC drilled two cores in Tuscarawas County “that gave us great encouragement in terms of porosities and permeabilities” in the Point Pleasant formation, says president John Eads.

That's a surprise, says Eads, as the Point Pleasant formation thins going south. "The results we're hearing from the field are excellent and exceed what we would have expected with the work we've done." Noble and Monroe "look impressive," he says. "Those appear to be exceptional wells. You're likely to see Washington and other counties come into play."

In southern Harrison County, newly formed Stingray Pressure Pumping LLC is preparing its very first frac pad on Gulfport Energy's Clay #1-4H with off-the-line new equipment. Stingray president Bob Maughmer says the new company, born of the Utica, will hire 50 to 80 people from the nearby St. Clairsville area, where it will be headquartered. "This coal-mining area has been depressed a long time. We're going to hire from the community," he says.

The company, created by and 50% owned by Oklahoma City-based Gulfport, illustrates the E&P's dedication to ramping up the drilling program in the south tail of the play.

"Gulfport made a strategic decision in 2011 to devote significant capital and operational attention toward establishing the Utica shale as a principal focus area for the company," chief executive James Palmer said in the company's second-quarter conference call.

The $1.5-billion company has operations in the Niobrara, Gulf Coast, Permian, Canadian oil sands and Thailand, and is now one of the top three public companies most leveraged to the Utica with 125,000 gross (62,500 net) acres in the play. Of that, it anticipates 73% will be in wet gas, 17% dry gas and 10% oil. The producer is teamed with long-time financial partner Wexford Capital. At the end of September, the company had eight wells drilled or drilling.

Running two rigs, Gulfport debuted with the Wagner, a wet-gas well whose results topped Chesapeake's fabled Buell well. Wagner's lateral was drilled 20% longer than the Buell's at 8,143 feet, and featured 28 stages to Buell's 18.

“The best wells are going to be in the retrograde gas phase or the volatile oil phase,” where viscosity is highest, says reservoir consultant W.D. (Bill) Von Gonten.

It is now on production, but choked to 10 MMcf per day with only the heavy NGLs currently being stripped via a nearby J-T (Joules-Thomson) Unit, the lone processing available in the play.

"The well is real strong," Palmer said just days after the well was flow tested. "Pressures are steady" at 5,000 psi. "It's looking really stout."

Gulfport's second well, Boy Scout 1-33H in Harrison County, featured a nearly 8,000-foot lateral with 22 stages. One stage was tested for several hours, with a calculated peak rate of 7.1 MMcf of 1,310 Btu gas and 1,560 barrels of condensate per day, or about 3,500 BOE per day. Wunderlich Securities analyst Irene Haas said this well bolsters confidence in the developing play. "We are becoming increasingly confident that well tests in the 3,000- to 5,000-BOE-per-day range for the company could become commonplace." This well is shut in waiting on pipe.

After resting 120 days, in October Gulfport's Shugert 1-1H in Belmont County, drilled with a shorter lateral at 5,758 feet, tested at a peak rate of 20 MMcf of natural gas, 144 barrels of condensate and 2,002 barrels of NGLs per day assuming full ethane recovery, or 4,913 BOE per day, taking the record for most prolific. Casing pressure was 4,840 psi.

Newly formed Stingray Pressure Pumping LLC builds its first fracture stimulation site with brand-new equipment at Gulfport Energy’s Clay #1-H in Harrison County. The well has a 6,500-foot lateral with 25 stages planned, at 250 feet each.

Gulfport, however, anticipated all of its production-lying-in-wait and to come would have an outlet by the end of October. A new Mark-west Energy Partners cryogenic processing plant in Harrison County, eight miles south of the Wagner and in which Gulfport is the anchor tenant, will initially come online with 50 MMcf per day capacity, able to strip all liquids but ethane initially. Further frenzied build-out is ongoing.

The company expects to have 20 wells drilled and 10 wells producing by year-end. A third rig this year is likely, with plans to add a fourth to drill 50 wells in 2013, and 70 the following year with six rigs. It has identified 780 locations on 160-acre spacing.

"It's been a surprisingly consistent and predictable area," Palmer said. "It's going to lend itself to a real manufacturing operation."

He added, "It's going to be quite a play for us. The Utica shale is a huge part of Gulfport's future, and we are preparing to execute accordingly."

Union Drilling Rig #121 drills Gulfport Energy’s Boy Scout 5-33H, the second well from a pad on a Boy Scout ranch in Harrison County, Ohio.

Southside celebrations

Eclipse Resources is another private-equity-sponsored company making a move on the Utica, focused south of the epicenter. Formed in February 2011 and backed by EnCap Investments with a $230-million commitment, the State College, Pennsylvania, company looked at Chesapeake's early success in Carroll and Harrison counties and decided to find an area of the play where it believed it could sustain similar results, and where acreage was still available at a cost representative of the risk at the time.

"We were looking for a field that could be analogous to Chesapeake's initial results. We landed in Noble and Guernsey counties, not focusing on the total Utica, but the Point Pleasant in particular," says Ben Hulburt, Eclipse president and chief executive.

Here on the southernmost end of the play, the Point Pleasant is about 10 feet thinner than in Carroll and Harrison counties at 110 to 120 feet, but conventional well logs showed the porosity, organic content and permeability within the Point Pleasant looked similar. Depth was almost identical to the depth up north where results looked promising.

UDI deck hand William Comptom moves drill pipe.

Eclipse currently holds about 50,000 gross acres, with 28,000 net, prospective for the Utica, with about 15,000 of the net in the wet-gas and condensate windows of Noble and Guernsey counties. After coring a vertical well in northern Noble County, Eclipse then teamed up with privately held Antero Resources for a portion of its acreage in Noble County, giving Antero a 70% operated interest.

In July, the Miley 5H well tested at 3,200 BOE per day, calculated assuming full ethane recovery, with 60% liquids and 7 MMcf per day of gas. Hulburt noted a strong condensate yield from the well "in excess of 100 barrels per million cubic feet." The lateral was drilled at 6,300 feet. Notably, Miley did not undergo a dissipation period prior to the test. But as no processing capacity is in the area as yet, the Miley well has been shut in since July.

"Our Miley well with Antero is an extraordinary well," says Hulburt. "We feel strongly that where we are is working well. We're on the leading edge of this part of the play, and the Miley went a long way toward proving the northern half of Noble County, which I think should be included in the core part of this play."

While no decline curve yet exists, Hulburt says he is confident reserves will be in excess of 1 million BOE.

Antero has drilled a second well with a 6,800-foot lateral to the west of Miley in northern Noble County, the Sanford, which at press time was flowing back. "We're encouraged by what we see in the initial flow of the second well," he says. This one also did not soak, and Hulburt says he does not yet know if the technique will be necessary in this part of the play.

Above, Eclipse Resources LP president and chief executive Ben Hulburt says, “We went into this area thinking it would be 75% as good as Carroll County. It’s looking like the results are better.”

No additional wells are currently being drilled within the area of mutual interest, pending infrastructure buildout.

In 2013, Eclipse plans to run two rigs apart from the Antero partnership, with its capex split between its Utica and Marcellus programs. It is modeling 120 acres per well.

Looking to results of neighboring operators, Hulburt says he is comfortable that the northern half of Noble and Guernsey counties "look very good. The well results have actually been better than the Carroll County area, in what we originally saw as the core of the play," he says. "We went into this area thinking maybe it would be 75% as good as Carroll. It's looking like the results are better."

Light and black oil

Two kinds of oil are possible in this play. The black-oil window west of a line where the base of the Point Pleasant increases above 4,000 feet subsea level is likely going to be uneconomic due to increased fluid viscosity and lack of reservoir pressure, per Von Gonten. However, in a band between there and depths of about 5,500 to 6,000 feet, opportunity abounds for the lighter crude and volatile oil.

"The oil window is going to work at certain pressures," says Von Gonten. "As you get shallower, you lose pressure and increase viscosity. We don't know yet exactly where that economic band is."

He likes Tuscarawas, Stark and Guernsey counties for volatile oil. "They're all good. Volatile oil has high energy and low viscosity." Black oil, he says, "is good to a point."

New pipe is being laid in the eight-mile stretch between Gulfport Energy’s Wagner well pad and the under-construction MarkWest Cadiz cryoplant facility in Harrison County, Ohio. Gulfport has first dibs on processing capacity here, with 50 million cubic feet per day processing capacity to come online in November, another 125 MMcf in first-quarter 2013, and potentially 200 MMcf per day more by year-end 2013.

While it has let Chesapeake derisk the wet-gas phase of the play, EnerVest has drilled an additional three operated wells in the volatile oil window. Frank Unit 2H was drilled in northeastern Stark County with a 6,780-foot lateral and 24 stages. After dissipating for 60 days, EnerVest flow-tested the well in August for 24 hours. The result: 870 BOE per day, consisting of 360 barrels of 47-degree API oil, 1.2 MMcf of dry gas and 312 barrels of NGLs. Artificial lift equipment was installed before shutting it in for an additional 60 days.

"When the gas-lift system is operational, that should give us a much higher rate than we experienced during the 24-hour natural flow period," Houser says. Projecting production over time, he says, "the Frank well actually looks better than the very early Eagle Ford wells."

The operator has drilled two other Utica oil wells. The RDHK, drilled by Chesapeake and completed by EnerVest, was drilled shorter at 3,400 feet laterally with 13 stages due to land limitations. It is currently producing, but results remain undisclosed pending EnerVest's asset-divestiture process. The Habrun #5 in southwestern Stark County is presently dissipating for 120 days.

"We are dissipating the wells in the oil window longer than those in the gas-window," says Gajdica. "The length of the dissipation period is still a trial-and-error process." The general consensus is higher-viscosity oil needs to dissipate longer than gassier wells.

Tom Noble, manager of the Markwest refrigeration plant project, shows maps of the site in Harrison County, Ohio.

With more than 500 well logs, cores and pressure readings from vertical wells across EnerVest holdings, Gajdica is confident the de-risking of the Utica oil window is done from a geologic perspective. "We have excellent well control to make accurate geologic maps." But the proof is in the production, he acknowledges, and sparse production data exist. To date, 10 wells have been drilled into the oil window, with most waiting on dissipation.

All that considered, "the economics for the volatile-oil window look great," says Gajdica. "We're very optimistic about the volatile-oil window and anticipate a ramp up in drilling activity. This is going to be a bonanza."

Up and to the right

For a start-up formed earlier this year, Hal-con Resources Corp., led by former Petrohawk Energy founder Floyd Wilson, has come on strong, gaining leading positions in a number of liquids-bearing unconventional plays. The Utica is one of its anchor positions, with 130,000 net acres. What's intriguing is where this position is located. Halcon has built its block in northeastern Ohio in Trumbull and Mahoning counties, and northwestern Pennsylvania in Mercer, Venango and Crawford counties, decidedly north of the play's epicenter.

"We've been very specifically buying land in areas we consider to be oily and in the volatile area where you have plenty of pressure to move liquids along," Wilson told investors at Bar-clays Energy and Power conference in September.

The northeast arm of the play is gaining fast attention. Although the Point Pleasant formation thins as it trends east, the Utica itself becomes a major contributor beyond Mahoning and Trumbell counties in Ohio, and into the northwestern corner of Pennsylvania. Mercer, Venango and Crawford counties are hotbeds of leasing activity at present. Other companies building positions here include Range Resources Corp. and Cabot Oil & Gas Corp.

New pipe is being laid in the eight-mile stretch between Gulfport Energy's Wagner well pad and the under-construction MarkWest Cadiz cryoplant facility in Harrison County, Ohio. Gulfport has first dibs on processing capacity here, with 50 million cubic feet per day processing capacity to come online in November, another 125 MMcf in first-quarter 2013, and potentially 200 MMcf per day more by year-end 2013.

"This is the thick part of the Utica" at 200 feet, says Von Gonten. "The Utica gains porosity and the clay content is reduced. The Utica really expands, and has porosity and permeability." With so much attention on the Point Pleasant being the sweet spot, can Utica-only results match up? Yes, he says confidently, pointing to Venango County on the map. "It's darn red. That's good stuff."

Wilson noted that all reported activity in the play has been positive. "We haven't seen any disappointments located on the bright part of this map," he said, referring to Halcon's map of projected commodity windows. "The important thing to me is the early activity has matched the reconnaissance mapping." The company plans seismic work in the fourth quarter.

Acknowledging that the Point Pleasant is the "work horse" in the southern portion of the play, to the north the Point Pleasant pinches out and the Utica bears the load. No worries, he said. "The rock property measurements are very good in terms of total organic content, clay content and saltwater saturations," he assured. "And it's consistent."

Halcon moved two rigs into the play in October and plans to spud four to six wells by yearend. It estimates spud-to-production time of 120 days, including resting the wells for 60 days.

Option on the dry

Well results in the dry-gas band at the far eastern edge of Ohio and into the West Virginia thumb and Pennsylvania are considered as prolific as the dry-gas Marcellus play nearby—typical initial production rates are 10- to 15 million cubic feet of gas per day—but not a target for full-bore development as yet due to natural gas prices.

"The dry gas is great," acknowledges Von Gonten, with wells having up to 10-Bcf EURs. "It's just the economics of it."

Eclipse holds an additional 13,000 net acres in Monroe County in what it calls its Ohio River Project. This position was acquired targeting the liquids-rich zone of the Marcellus, but dry-gas Utica opportunity underlies that. It is currently drilling two 100%-operated wells there on a single pad, one targeting Marcellus, the other Utica. "We at least want to know what's there," he says, indicating two more dry-gas Utica wells are likely for next year.

Here in the dry-gas window, "the rock looks great," he says, but "unfortunately, it's just dry gas." However, returns might be good enough to incentivize further development at gas prices above $4. "It doesn't need to be $5 or $6."

"It's going to be a hot part of the play once prices return to economic levels," says Von Gonten.

Von Gonten compares the economics of the retrograde gas and volatile oil phases of the Utica to the Eagle Ford shale, with 100 barrels of NGLs per million cubic feet of gas, and an average of 50 barrels of condensate per million. "They're extremely profitable wells."

Having solved the dissipation problem and with those wells presently coming online, operators are now deploying better science into the completions, which should be evident in first-quarter 2013 results. "I think we'll get this reservoir to a 3- to 5-Bcf-plus-liquids play," he says. "The learning curve will be fast."

As a consultant that looks at shale plays worldwide, Von Gonten particularly likes what he sees in the Utica shale. "We're excited about the play. It's a complicated reservoir, and there is more to it than just looking at the performance of the wells."