Chesapeake Energy expects to maintain seven to nine drilling rigs in the four-county area it has defined as the "Utica's core wet gas window" as it moves forward in 2014.
The area includes Columbiana, Carroll, Harrison and Jefferson counties, all targeted for production development, which, according to CHK.com, had upwards of 17 rigs operating in it in 2013.
Chesapeake Exploration is the biggest player in the Utica Shale boom and as of Feb. 6 has 98 wells in Columbiana County. Four other companies own rights to eight other wells in the county.
During a conference call last week, Chris Doyle, senior vice president of operations in the company's northern division, said Chesapeake intends to fill its current capacity.
During the call, transcribed on the Seeking Alpha website, Doyle addressed the adjustment of assets by comparing cycling times of Chesapeake's drilling program, headed by its subsidiary company Nomac Drilling, as something "very few if any of our competitors are able to do."
He added that a seven- to nine-rig program is more like a 20-rig program with other companies.
"So we don't see issues, (we) own acreage it's going to be value driven and we're really excited by what we're seeing," Doyle said.
Neal Dingmann of SunTrust wondered about the Utica play.
"It looks like obviously some of your other areas ... primarily it's most in the oil pad drilling this year, the seven to nine rigs, is it fair to say most of those will continue to be where they were around Carroll County and some of that area?
"I'm just wondering, number one, kind of regionally what you would be focusing on? And then, number two, given that pad drilling and the number of rigs running, would you be able to hold most of that acreage that you have in that play?
Doyle said, "I think a fair thing ... what we will be focused on ... is filling the capacity that we've got; we'll probably push a little bit to the south."
Regarding the oncoming processing capacity that has restricted drilling, Dingman asked, "Will that still continue to be the case for most of this year, or, at a certain point ... "
Doyle noted 2014 is a huge year for Chesapeake.
"We brought in the second train of Kensington," he said, referring to the M3 Midstream LLC (Momentum), Texas-based EV Energy Partners and Chesapeake Midstream Development gas processing plant in Columbiana County.
"We will continue to ramp (up) ... our exit capacity from where we ended 2013. We will see less gas behind the choke as we move through the year.
"But honestly the well results that we're seeing are very favorable and like I said we're really excited about this asset."
Doug Lawler, Chesapeake's CEO, was asked how the Utica is "classified" in terms of dry shale versus associated gas production.
"Well," he said, "we view Utica as a huge liquid lever for us." email@example.com