Utica Shale in Ohio is major part of Encino Energy’s business
CANTON – The Utica Shale is proving to be more productive, with oil and natural gas wells exceeding the expectations of Encino Energy Partners.
The Houston company claimed a stake in the Utica Shale in eastern Ohio with a $2 billion acquisition of Chesapeake Energy’s operations here. Encino partnered with the Canada Pension Plan in 2018 to buy Chesapeake’s holdings.
Since making the move, Encino has drilled about 150 new wells, giving it roughly 1,000 oil and gas wells in the formation, which extends from Stark and Columbiana counties south to the Ohio River and into Pennsylvania and West Virginia.
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The wells have performed great and been productive, said Hardy Murchison, co-founder, president and chief executive officer of Encino Acquisition Partners.
“We’ve been able to take something we believed would be good and make it better,” Murchison said during an interview while attending the recent Utica Green Upstream & Midstream Conference organized by the Canton Regional Chamber of Commerce and Shale Directories.
Utica operations in Ohio are the most important part of Encino’s business, Murchison said.
The company has taken a deliberate approach to its development in the Utica Shale. It initially operated a pair of drilling rigs, but added a third. The goal has been to maintain steady growth as it navigates the oil industry’s traditional boom or bust business environment.
“We manage for stability,” Murchison said.
Louisville property sold
Encino has seen growth in its Ohio workforce, but the coronavirus pandemic changed the company’s operations.
As with other companies, Encino’s workforce left the office and started working from home.
“We found because of the pandemic, we don’t need a big office,” Murchison said.
Chesapeake’s property in Louisville was sold to original developer Groffre Investments, which since has sold the five-story office building to 2321 Energy Drive-Louisville. Officials in Louisville have met with the new owner, but declined to discuss plans for the building.
Murchison said most employees are able to travel from their homes to well pads and work sites. Encino has opened a small office in the Carrollton area, he said.
Encino operates much like a general contractor on a construction project. The company supports thousands of jobs because it works with dozens of businesses that provide a variety of services needed for drilling, Murchison said.
Gas still primary product
Wells operated by Encino continue to extract more natural gas than oil, with about 70% of the product as dry gas. One factor is that oil molecules are larger and more challenging to extract from shale. Improved processes could lead to increased oil production in the future, he said.
Most of the Utica drilling has been in southeast counties where gas is usually found. Murchison said oil is likely to be found in the northern and western parts of the formation.
Oil produced by Encinio’s Utica wells usually stays in the region, Murchison said. It’s sold to refineries in Ohio, including Marathon Petroleum Co.’s facility in Canton, and processed as gasoline.
Roughly half of the natural gas produced in the Utica is shipped to the Gulf Coast, and much of that is shipped to customers in Europe. The rest is used locally at gas-powered electric plants or shipped to Canada, Murchison said.
Encino plans to maintain its methodical approach to developing its Utica Shale holdings. There is safety in taking things slowly, Murchison said. Fewer mistakes are made and problems can be avoided.
The steady drilling allows Encino to recycle about 80% of the water used to fracture wells. The company has reduced the amount of water it has to source, as well as the amount disposed of after drilling, Murchison said.
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