A couple of weeks ago Chesapeake announced the release of 504,000 acres prospective to the Niobrara in Colorado’s DJ Basin. This week it’s Chesapeake’s prized Ohio Utica acreage. The company out spent everyone else, buying up leases early throughout the play. The company boasts that they are the largest leasehold owner with 1.3 million net acres, in their May investor presentation. Also included in the report are operational plans to average 13 rigs this year and ramp up to 22 rigs in 2013. Chesapeake has drilled 59 wells, 9 are currently producing, 15 are being completed, 15 are waiting to be completed and 20 wells are waiting on pipeline infrastructure. So, the company is still poised to explore their position and continue push for liquids production. However, the advantage of having so much prime land is the option to sell a piece when cash is tight.
Here is a snapshot of Chesapeake’s position in the Utica/Point Pleasant. Below that, one can observe the source rock’s producing potential from the core analysis map generated by the ODNR Geological Division.
Source: Geology and Activity Update of the Ohio Utica-Point Pleasant Play, Wickstrom, etal.
The acreage for sale makes up 510,847 gross acres and is primarily in the oil/wet gas windows. This leaves the company with around 963,000 net acres. This is still more acreage than any competitors in the play. Now that shareholders are calling the shots, having cut capital spending and trying to bring back up stock prices, the idea to sell this acreage was probably as easy as slicing pie. The bid date is set for July 11th with an effective date of sale July 1st and closing date tentatively set for August 17th.
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