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Texas company to seek buyers for Utica Shale acreage, other assets

Texas-based EV Energy Partners plans to sell off Utica Shale assets in eastern Ohio next year, along with its interest in related processing facilities.

There has been “enough drilling activity and consistent result to de-risk our assets and acreage,” said John Walker, the company’s executive chairman.

The value of the company’s Utica Shale leases has grown significantly, Walker said in an earnings call with analysts and the media this week.

The company intends to kick off a serious sale effort in January, including its joint-venture acreage with Chesapeake Energy and Total SA in 10 Ohio counties, he said.

The company wants to sell about 120,000 acres within its 660,000-acre joint venture. About 55,000 of the acres are in Carroll County.

EV Energy Partners also intends to seek a buyer for its 21 percent interest in Utica East Ohio, which operates natural gas processing plants in Columbiana and Carroll counties and a liquids-separating plant in Harrison County.

Last month, EV Energy Partners sold its 9 percent interest in Ohio’s Cardinal Gas Services to two South Korean companies for $162 million.

EV Energy Partners, a publicly traded company that is part of privately held EnerVest Ltd., has said for some time that it intends to sell Utica assets to monetize holdings for its institutional investors. The company has been marketing about 335,000 acres in Ohio since 2013.

Related: Gulfport Energy struggles to find new areas to lease in the Utica

EnerVest companies are among Ohio’s largest oil and gas operations with 8,700 vertical wells. They were the state’s largest producer from traditional gas and oil wells and generated 25 percent of Ohio’s natural gas prior to the recent Utica Shale boom. They control about 900,000 acres in Ohio.

In another development, EV Energy Partners said production could begin in December on a much-watched Utica oil well in Tuscarawas County.

The company drilled the experimental well with eight other industry partners, Walker said.

“This is a test of what could be EnerVest and EVEP’s most valuable asset in the Utica,” he said.

Getting oil from Utica Shale has proven to be difficult for drillers.

The well, near Uhrichsville, is being hydraulically fractured with liquid butane and mineral oil. That process should be completed in two weeks.

“We’re excited but cautious as we are bringing new technology to bear in this process,” company President and CEO Mark Houser said. “We … have completed five of the 20 [fracking] stages so far.”

A full review of the well will be offered in the next few months, he said.

The Utica Shale’s oil window covers all or parts of Portage, Stark, Trumbull, Tuscarawas, Holmes, Coshocton, Guernsey, Muskingum, Perry, Morgan, Athens, Vinton and Hocking counties.

EV Energy Partners also is getting about 80 barrels of oil per day — plus natural gas — from four Stark County horizontal wells that were drilled into the shallow Clinton sandstone. A fifth well is not yet in production.

Drilling each well costs about $2.6 million. Each well is projected to produce about 150,000 barrels of oil equivalents, which could generate a 20 percent return on investment at $80 per barrel for crude oil.

The company said the East Canton oil field, where more than 4,000 wells have been drilled since 1947, holds an estimated 1.5 billion barrels of oil with only 7 percent recovered so far.

 

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