The Debrosse Memorial Report 2016 Oil & Gas Activity in Ohio 70 th Annual Winter Meeting Prepared by: Marty Shumway Locus Bio-Energy Solutions LLC; Shumway Resources LLC Bill Arnholt - Northwood Energy Corporation Tim Knobloch - James Knobloch Petroleum Consultants, Inc.
The Debrosse Memorial Report 2016 Oil & Gas Activity in Ohio - Outline General overview of Ohio oil & gas production Permits & completion summaries Operator activity (footage drilled, number of wells) Activity by county (footage drilled, number of wells) IP analysis for horizontal wells Change of owners Production summary Utica EUR summary Class II injection well summary
Oil & Gas Production in Ohio More than 275,000 oil and gas wells drilled in Ohio since 1860 More than 50,000 producing wells in 49 of 88 Ohio counties
6000 5000 History of Ohio Wells Drilled by Year and Reservoir BEREA OHIO SHALE CLINTON TRENTON ROSE RUN CAMBRIAN NW Ohio Lima-Indiana Clinton Play Tight Gas Sands 4000 3000 Morrow County Trempealeau Play 2000 1000 Clinton Play Technologic Advance: Hydraulic Fracturing Clinton/Berea Plays 0
2016 Permit & Completion Activity PHOTOGRAPHS COURTESY OF LARRY WICKSTROM
Permits & Completions - 2011-2016 TYPE 2011 2012 2013 2014 2015 2016 ( 15 to 16) % PERMIT 690 903 1,608 1,659 997 561-436 -44% COMPLETION 460 553 580 654 534 620 86 16% PLUG 571 473 630 629 511 439-118 -14% TOTAL 1,533 1,929 2,818 2,942 2,318 1,113-1205 -52%
Permit and Completions By Month Permits Completions Plugging Permits 37 39 13 31 21 10 58 38 11 32 39 7 43 23 12 30 52 44 10 1 46 41 45 12 59 35 0 35 40 7 44 26 25 57 5 85 JAN FEB MAR APRIL MAY JUNE JULY AUG SEP OCT NOV DEC
Permitted Formations 400 372 350 300 250 200 150 100 50 0 111 28 18 13 7 4 4 2 1 1
2016 Completions Permits to Drill Permits to Plug ^_ COMPLETIONS (620) PERMITS (561) PLUG PERMITS (439)
2016 Completions Permits to Drill Permits to Plug
Operators Completing Wells By Year 116 127 147 162 182 143 126 121 112 113 89 87 71 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Wells Completed Type 620 Total Completions Vertical 136, 22% Directional 5, 1% Unknown 2, 0% Horizontal 477, 77%
2016 Horizontal Completions By Formation COMPLETIONS - TD FORMATION ^_ UTICA/POINT PLEASANT (466) ^_ MARCELLUS SHALE (7) ^_ CLINTON (2)
2016 Vertical Completions By Formation ^_ BEREA & SHALLOWER (16) ^_ DEVONIAN SHALE (5) ^_ BIG LIME, NEWBURG (4) ^_ CLINTON-MEDINA (33) ^_ POINT PLEASANT (4) ^_ TRENTON-BLACK RVR (7) ^_ KNOX UNCONFORMITY (21) ^_ ROME FORMATION (1) ^_ UNKNOWN (22)
2016 Class II Injection Well Completions By TD Formation ^_ CONASAUGA FORMATION ^_ ROME FORMATION
Completions By Month Horizontal Wells Vertical Wells 13 10 11 12 10 12 7 5 48 50 56 42 57 64 1 16 67 0 10 7 25 17 8 40 JAN FEB MAR APRIL MAY JUNE JULY AUG SEP OCT NOV DEC
Completions Top 10 Counties COUNTY TOTAL HORIZONTAL VERTICAL* BELMONT 120 110 10 HARRISON 102 98 4 MONROE 87 77 10 NOBLE 56 54 2 CARROLL 47 47 0 GUERNSEY 45 44 1 JEFFERSON 24 23 1 KNOX 15 0 15 LICKING 13 0 13 TUSCARAWAS 10 4 6 OTHER COUNTIES 75 20 55 TOTAL 594 477 117 *INCLUDES DIRECTIONAL AND UNKNOWN
Completions By County HORIZONTAL VERTICAL 10 4 10 110 98 77 2 0 1 55 54 47 44 1 23 15 13 6 4 20
Top 12 Most Active Operators By Wells OPERATOR % TOT WELLS 2016 WELLS % 2015 CHESAPEAKE EXPLORATION LLC 17% 99-31% ASCENT RESOURCES UTICA LLC 11% 66 200% ANTERO RESOURCES CORPORATION 11% 64 31% GULFPORT ENERGY CORPORATION 10% 62-13% ECLIPSE RESOURCES I LP 8% 46 156% CNX GAS COMPANY LLC 5% 29 N/A XTO ENERGY INC. 4% 24 300% RICE DRILLING D LLC 3% 18-5% ATLAS NOBLE LLC 3% 17 750% AMERICAN ENERGY CORP. 3% 17 1600% HESS OHIO DEVELOPMENTS LLC 2% 11-59% R E GAS DEVELOPMENT LLC 2% 11 22% TOP 12 OPERATORS DRILLED APPROXIMATELY 78% OF TOTAL WELLS IN 2016
Hess Ohio CNXGUE10N7W #H-8 PHOTOGRAPH COURTESY OF LARRY WICKSTROM
Top 12 Most Active Operators By Footage OPERATOR % TOTAL FOOTAGE 2016 FOOTAGE % 2015 CHESAPEAKE EXPLORATION LLC 20% 1,600,323-41% ANTERO RESOURCES CORPORATION 14% 1,086,226 25% GULFPORT ENERGY CORPORATION 13% 1,069,335-8% ASCENT RESOURCES UTICA LLC 13% 1,000,606 67% ECLIPSE RESOURCES I LP 9% 728,559 62% XTO ENERGY INC. 6% 449,723 78% CNX GAS COMPANY LLC 5% 415,226 100% RICE DRILLING D LLC 4% 298,320 9% HESS OHIO DEVELOPMENTS LLC 2% 187,974-148% ATLAS NOBLE LLC 2% 186,037 88% R E GAS DEVELOPMENT LLC 2% 135,725 10% PDC ENERGY INC 1% 115,876 29% TOP 12 OPERATORS DRILLED APPROXIMATELY 91% OF TOTAL FOOTAGE DRILLED IN 2016
Top 12 Most Active Counties By Wells COUNTY % TOT WELLS 2016 WELLS % 2015 BELMONT 20% 120 67% HARRISON 17% 102 13% MONROE 15% 87 64% NOBLE 9% 56 33% CARROLL 8% 47-42% GUERNSEY 8% 45-8% JEFFERSON 4% 24 2300% KNOX 3% 15 0% LICKING 2% 13 30% TUSCARAWAS 2% 10 150% COLUMBIANA 1% 8-43% MEIGS 1% 7-22% OPERATORS REPORTED COMPLETIONS IN 36 OF 89 COUNTIES IN 2016 VERSUS 34 IN 2015. TOP 12 COUNTIES 90% TOTAL WELLS
Top 12 Most Active Counties By Footage COUNTY % TOT FOOTAGE 2016 FOOTAGE % 2015 BELMONT 24% 1,944,150 72% HARRISON 20% 1,562,810 8% MONROE 16% 1,283,768 68% NOBLE 11% 858,620 53% CARROLL 9% 705,687-44% GUERNSEY 8% 642,440-8% JEFFERSON 5% 363,946 3772% COLUMBIANA 1% 118,211-43% MAHONING 1% 100,365 N/A TUSCARAWAS 1% 72,388 139% WASHINGTON 1% 46,608-35% LICKING 1% 42,232 106% TOP 12 COUNTIES ACCOUNTED FOR 97% OF TOTAL FOOTAGE DRILLED IN 2016
Drilling Footage and Wells By Year YEAR TOTAL FOOTAGE WELLS FOOTAGE PER WELL AVG IP GAS AVG IP OIL 2016 7,955,832 594 14,206 6,095 196 2015 6,587,714 534 12,336 5,432 279 2014 5,854,693 654 10,398 2,703 122 2013 3,898,408 569 7,570 1,361 97 2012 2,580,821 511 5,388 481 34 2011 1,832,121 454 4,192 136 7 2010 2,224,761 633 3,883 50 3 2009 3,036,431 927 3,767 223 2 2008 4,249,247 1149 3,750 54 3 2007 4,030,319 1094 3,928 70 3 2006 3,601,375 945 3,927 79 4 2005 2,718,759 673 4,095 123 4 2004 2,324,308 589 4,107 133 4 2003 2,419,254 561 4,359 88 5 2002 2,780,935 643 4,507 91 4 2015 TO 2016 AVG IP-GAS UP 12%; AVG IP-OIL DOWN 30% 2015 TO 2016 AVG FOOTAGE PER WELL UP 15%
Change of Owner Wells By Year 8000 7438 7000 6000 5000 4000 3000 2000 1000 3379 3568 4411 2412 5908 4758 3054 3142 3603 2274 1134 1696 1694 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YEAR 2016 NO LARGE CHANGE OF OWNER RECORDS, LARGEST WAS 269 WELLS
Rice Energy Razin Kane and Krazy Train PHOTOGRAPH COURTESY OF LARRY WICKSTROM
Top 12 Counties By Average IP (MCFE) COUNTY WELLS AVG IP GAS (MCF) AVG IP OIL (BBLS) AVG IP (MCFE) HARRISON 100 5,188 449 14,176 JEFFERSON 21 12,000 0 12,000 GUERNSEY 44 3,145 396 11,055 BELMONT 105 9,960 20 10,367 MONROE 72 9,225 52 10,267 CARROLL 45 4,230 302 10,260 NOBLE 54 4,686 194 8,564 TUSCARAWAS 7 1,629 269 7,009 MAHONING 7 3,941 32 4,581 WASHINGTON 5 2,632 78 4,200 COLUMBIANA 6 3,506 0 3,506 LICKING 9 182 22 617 COUNTIES WITH LESS THAN 4 WELLS ARE NOT INCLUDED MCFE CALCULATED USING OIL GAS RATIO OF 20:1
Top 12 Operators By Average IP (MCFE) OPERATOR WELLS AVG IP GAS (MCF) AVG IP OIL (BBLS) AVG IP (MCFE) ASCENT RESOURCES UTICA LLC 66 9,776 493 19,645 HESS OHIO DEVELOPMENTS LLC 11 13,372 277 18,920 CNX GAS COMPANY LLC 29 4,693 667 18,033 R E GAS DEVELOPMENT LLC 11 3,242 568 14,604 GULFPORT ENERGY CORPORATION 62 11,208 40 12,012 CHESAPEAKE EXPLORATION LLC 99 5,538 279 11,119 ECLIPSE RESOURCES I LP 46 6,214 210 10,423 CHESAPEAKE APPALACHIA LLC 5 8,853 0 8,853 ANTERO RESOURCES CORPORATION 64 6,938 91 8,767 XTO ENERGY INC. 24 6,630 0 6,630 PDC ENERGY INC 9 1,102 231 5,731 HILCORP ENERGY COMPANY 7 5,327 0 5,327 OPERATORS WITH LESS THAN 4 WELLS ARE NOT INCLUDED. MCFE CALCULATED USING OIL GAS RATIO OF 20:1
Average IP (MCFE) Top 12 Operators By Average IP (MCFE) Thousands 19.6 18.9 18.0 14.6 12.0 11.1 10.4 8.9 8.8 6.6 5.7 5.3 20 16 12 8 4 0 OPERATORS WITH LESS THAN 4 WELLS ARE NOT INCLUDED. MCFE CALCULATED USING OIL GAS RATIO OF 20:1
2016 Top 10 Operators By Average IP (MCFE) Well Locations!( ASCENT RESOURCES UTICA LLC!( HESS OHIO DEVELOPMENTS LLC!( CNX GAS COMPANY LLC!( R E GAS DEVELOPMENT LLC!( GULFPORT ENERGY CORPORATION!( CHESAPEAKE EXPLORATION LLC!( ECLIPSE RESOURCES I LP!( CHESAPEAKE APPALACHIA LLC!( ANTERO RESOURCES CORPORATION!( XTO ENERGY INC.
PHOTOGRAPH COURTESY OF LARRY WICKSTROM Ohio Oil & Gas Production
COUNT OF WELLS Producing Wells By Year 60000 50000 Producing Wells (ODNR) Reported Production 40000 30000 20000 10000 0 1984 1989 1994 1999 2004 2009 2014 YEAR YEAR 2016 WELL COUNT IS ESTIMATED
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 8.1 7.3 7.1 7.1 7.0 6.6 6.8 6.7 5.9 5.4 5.7 6.3 5.6 5.2 5.0 5.0 5.0 5.0 5.1 4.4 4.8 4.6 4.5 4.3 4.0 3.5 3.1 0.6 3.7 Million Barrels of Oil 11.0 17.5 22.0 Production Summary Oil By Year 30 Conventional Oil Horizontal Oil 25 20 2016 PRODUCTION IS ESTIMATED TO BE APPROXIMATELY 19% LESS THAN 2015 PRODUCTION 15 10 2016 CONVENTIONAL OIL PRODUCTION ESTIMATED 2016 HORIZONTAL OIL ESTIMATED (ONLY FIRST 3 QUARTERS AVAILABLE) 5 0 YEAR 2016 CONVENTIONAL PRODUCTION IS ESTIMATED BY USING AVERAGE ANNUAL PERCENT DECLINE FOR YEAR 2012-2015.
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 121 104 113 118 115 106 111 106 108 90 92 89 88 85 83 77 79 76 82 81 79 78 72 66 60 52 46 13 100 Billion Cubic Feet of Gas 452 954 1,397 Production Summary Gas By Year 1600 1400 Conventional Gas Horizontal Gas 1200 1000 800 600 400 2016 PRODUCTION IS ESTIMATED TO BE APPROXIMATELY 44% MORE THAN 2015 PRODUCTION 2016 CONVENTIONAL GAS PRODUCTION ESTIMATED 2016 HORIZONTAL GAS ESTIMATED (ONLY FIRST 3 QUARTERS AVAILABLE) 200 0 YEAR 2015 CONVENTIONAL PRODUCTION IS ESTIMATED BY USING AVERAGE ANNUAL PERCENT DECLINE YEAR 2012-2014.
MILLIONS OF BARRELS OF OIL 30 25 20 15 Ohio Oil Production 1886-2015 1896 23.9 MMBLS TRENTON 1964 15.9 MMBLS TREMPEALEAU 1984 15.3 MMBLS CLINTON 2015 25.6 MMBLS UTICA 2016 20.6 MMBLS UTICA 10 5 1945 3.0 MMBLS EOR 1952 HYDRAULIC FRACTURING 2010 4.7 MMBLS 0 1876 1886 1896 1906 1916 1926 1936 1946 1956 1966 1976 1986 1996 2006 2016 YEAR HISTORICAL DATA COURTESY OF WICKSTROM GEOSCIENCE, LLC
OIL (BBLS) / GAS (MCF) COUNT OF WELL 100000 Ohio s Aging Wells Average Annual Oil Average Annual Gas Count of Wells 4000 10000 3000 1000 100 10 1 54% OF ~53,000 PRODUCING WELLS ARE BETWEEN 25 & 39 YEARS OLD 0 5 10 15 20 25 30 35 40 45 50 WELL AGE - YEARS 2000 1000 0
UTICA PRODUCING WELLS BY OPERATOR Through 12/31/2016
Gas in BCF Utica Gas Production By Quarter 400 350 9% 1% 8% 330 334 361 300 23% 302 250 200 150 100 50 0 8 1st Qtr 2013 15 2nd Qtr 2013 3rd Qtr 2013 19% 34 4th Qtr 2013 56% 43 1st Qtr 2014 33% 67 89 2nd Qtr 2014 48% 3rd Qtr 2014 25% 132 4th Qtr 2014 1st Qtr 2015 2nd Qtr 2015 3rd Qtr 2015 4th Qtr 2015 1st Qtr 2016 2nd Qtr 2016 3rd Qtr 2016 Gas 8.30 15.07 33.51 43.06 67.28 88.62 131.98 164.78 183.59 221.86 245.83 301.96 329.54 334.26 360.68 12% 165 21% 184 11% 222 246 SLOWING PRODUCTION GROWTH BEGINNING 1 st QTR 2016
Oil in Millions of Bbls Utica Oil Production By Quarter 7 6 5 4 3 2 1 0 1st Qtr 2013 0.3 2nd Qtr 2013 0.6 3rd Qtr 2013 9% 1.3 4th Qtr 2013 36% 1.4 1st Qtr 2014 27% 1.9 2nd Qtr 2014 22% 2.5 3rd Qtr 2014 18% 3.0 4th Qtr 2014 1st Qtr 2015 2nd Qtr 2015 3rd Qtr 2015 4th Qtr 2015 1st Qtr 2016 2nd Qtr 2016 Oil 0.33 0.57 1.31 1.43 1.94 2.46 3.01 3.55 4.43 5.58 5.71 6.22 5.49 4.84 3.95 25% 3.6 26% 4.4 2% 5.6 9% 5.7 6.2-12% 5.5-12% 4.8-18% DECLINE BEGINNING 1 st QTR 2016 3rd Qtr 2016 4.0
Wells Online Utica Wells Online By Quarter 1600 1400 1200 1000 800 600 400 200 0 2012 81 92 1st Qtr 2013 2nd Qtr 2013 152 3rd Qtr 2013 243 4th Qtr 2013 19% 349 1st Qtr 2014 21% 417 34% 2nd Qtr 2014 503 16% 3rd Qtr 2014 4th Qtr 2014 1st Qtr 2015 2nd Qtr 2015 3rd Qtr 2015 4th Qtr 2015 1st Qtr 2016 Wells 81 92 152 243 349 417 503 673 778 877 978 1093 1221 1303 1364 1442 673 13% 778 12% 877 12% 978 12% 1093 7% 1221 6% 5% 1442 1364 1303 2nd Qtr 2016 3rd Qtr 2016
Utica EUR Estimation Used operator reported production to ODNR through 3 rd Qtr 2016 Calculated EUR values for each well Adjusted EUR to gas equivalents (BCFE) used GAS/OIL ratio of 20:1 (based on current market prices) Determined treated length (stimulated interval) and then calculated EUR per 1000 of lateral
UTICA ESTIMATED AVERAGE EUR PER 1000 BY TOWNSHIP USING GAS:OIL RATIO OF 20:1 (Count of data points per township posted) EUR Data Provided by James Knobloch Petroleum Consultants, Inc.
PHOTOGRAPH COURTESY OF LARRY WICKSTROM Class II Injection Wells
Water Volume Injected (Bbls) Annual Injection Volume - Statewide 35 30 20% 25-8% 29% 20 16% 15 14% 10 5 0 2011 2012 2013 2014 2015 2016 Series2 12,689,735 14,675,408 17,474,821 25,277,646 31,681,718 29,359,014
Top 12 Class II Injection Wells By Volume OPERATOR COUNTY WELL THE TOP 12 WELLS ACCOUNTED FOR 47% OF TOTAL WATER INJECTED IN 2016 VOLUME (BBLS) REDBIRD DEVELOPMENT WASHINGTON RED BIRD (SWIW #18) 1,937,197 ENVIRONMENTAL ENERGY SOLUTIONS MUSKINGUM PATTISON TRUST (SWIW #30) 1,697,250 ELKHEAD GAS & OIL TUSCARAWAS MOZENA (SWIW #13) 1,498,932 CLEARWATER THREE, LLC GUERNSEY CLEARWATER 111 (SWIW #15) 1,486,103 CLEARWATER THREE, LLC GUERNSEY BO (SWIW #20) 1,372,107 REHYDRO LTD./MASON DRILLING TUSCARAWAS RE-HYDRO (SWIW #10) 1,033,143 BUCKEYE BRINE LLC COSHOCTON ADAMS (SWIW #12) 931,329 BUCKEYE BRINE LLC COSHOCTON ADAMS (SWIW #11) 821,424 K & H PARTNERS LLC ATHENS K & H PARTNERS LLC (SWIW #10) 813,095 HEINRICH ENT. WASHINGTON HEINRICH UNIT 800,775 NUVERRA/HECKMAN MUSKINGUM GOFF SWD (SWIW #27) 734,493 K & H PARTNERS LLC ATHENS K& H PARTNERS LLC (SWIW #8) 733,388
THANK YOU! Marty Shumway (614) 846-1391 marty@shumwayresources.com Special Thanks To: Ohio Oil and Gas Association Bill Arnholt, Northwood Energy Tim Knobloch, James Knobloch Petroleum Consultants, Inc. Larry Wickstrom, Wickstrom Geoscience, LLC