Large reserve of Utica Shale gas could lie beneath state forest land

Tapping the Utica Shale in north central Pennsylvania could become the state’s next natural gas drilling boom, at least once the pipelines get built. Seneca Resources has announced the successful completion of a well on state forest land in Tioga County. Seneca, a subsidiary of National Fuel Gas Company, says its test well generated 22.7 million cubic feet of natural gas daily.

National Fuel Gas Company CEO and President Ronald J. Tanski praised the results in a release, saying the development could lead to more Utica Shale gas drilling on state forest lands in Tioga County and other parts of the state.

“This well, along with wells drilled by other operators in the area, have de-risked the Utica potential of our 10,000 acres on DCNR Tract 007. We estimate resource potential on this tract alone of approximately 1 trillion cubic feet. With these strong results in hand our team is evaluating options to develop this acreage in the next few years, depending on local gas prices and pipeline take-away capacity. We have additional Utica potential not only in Tioga County, but across much of our large Pennsylvania acreage position. Our next Utica exploration well is planned for fiscal 2016.”

One trillion cubic feet is a lot of untapped natural gas. But right now, that test well is shut in because there’s no pipeline infrastructure in that part of the state to take it to market. Tioga County is one of the most remote parts of Pennsylvania, and includes the prized “Grand Canyon of Pennsylvania,” popular with hikers and campers. The 10,493 acres of forest land where the Seneca test well lies was leased to the gas producer by the Rendell Administration back in 2010 for $48,530,125. So far, that DCNR lease has not seen much development.

The Utica Shale lies several thousand feet below the Marcellus, and occupies a larger footprint, stretching from Quebec to upstate New York, through Pennsylvania, down into West Virginia and west through Ohio. Last September, Royal Dutch Shell announced the successful completion of two Utica wells in Tioga County. This latest announcement, along with the two Shell wells nearby, could indicate that the sweet spot for Utica shale may extend beyond Ohio and southwestern Pennsylvania. In December, Range Resources announced a Utica well in Washington County has a daily flow rate of 59 million cubic feet of natural gas.

The test well (often referred to as an exploratory well), located in the Tioga State Forest on DCNR Tract 007, was drilled to a depth of 12,200 feet, and then continued horizontally for another 4,640 feet. A typical well pad would have several wells with horizontals running in all directions for much longer distances. The well was fracked 30 times, which may indicate just how difficult it is to penetrate the Utica Shale. But if gas prices rise, and pipelines make their way to Tioga County, the Utica Shale may prove to be lucrative to gas producers and generate more funds flowing into the state’s Oil and Gas Lease Fund.

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