Ohio oil and gas activity, exploration on the upswing

Michael P. McCormac
Ohio Division of Oil & Gas
Columbus

Higher oil and gas prices combined with an improved exploratory success rate (Fig. 1 [34249 bytes] and Table 1 [70144 bytes]) helped increase drilling. The number of discoveries since 1990 has helped energize operators and change their drilling focus.

The Ohio industry in 1996 continued its progression from a low-risk, mature play in Silurian Clinton sandstone to a higher risk, high reward immature play in Cambrian Rose Run sandstone. The recent deeper formation reserve additions have helped stabilize the production declines associated with the more mature plays.

Permitting, drilling

The Division of Oil & Gas issued 920 permits to drill for oil and gas in 1996, a 7.1% increase from 1995.

Deep well permits increased 6.6% and accounted for half of all drilling permits. The division considers deep well permits as those issued to drill to formations below the Cambro-Ordovician Knox unconformity, such as the Beekmantown dolomite, Rose Run sandstone, Trempealeau dolomite, and Mt. Simon sandstone.

The division by law has 21 calendar days to issue or deny a permit application. Permits were issued in an average of 12.5 days. To this writing in April 1997, drilling permits are up 23% compared with the same time in 1996.

An estimated 712 oil and gas wells were drilled in 1996, an increase of 44 wells or 6.2% from 1995. Wells were drilled in 46 of Ohio's 88 counties, a decrease of two counties from 1995.

Ohio oil and gas owners/operators submitted 630 well completion reports, representing 88.5% of the wells drilled in 1996. These reports showed that 482 wells were productive and 148 were dry holes for a 76.5% completion rate. Total depths ranged from 222 ft in the Pennsylvanian Cow Run sandstone in Morgan County to 8,516 ft in the Rose Run sandstone in Tuscarawas County (Table 2 [10322 bytes]).

An estimated 3,214,914 ft of hole were drilled, an increase of 180,567 ft from 1995. Well depth averaged 4,515 ft, a decrease of 138 ft/well from 1995.

Ohio completions

Completion zones ranged from several shallow Pennsylvanian sandstones to the Precambrian basement.

The Clinton sandstone remained the most actively drilled zone since 1965. An estimated 256 wells were drilled, three more than in 1995. Clinton had 39% of total completions with a 97.1% completion rate. Clinton well depth averaged 4,685 ft, a decrease of 124 ft/ well from 1995.

Clinton sandstone wells were drilled in 25 counties. The most actively drilled Clinton sandstone counties were Mahoning with 39 wells and Stark with 33.

Drilling to Cambro-Ordovician Rose Run sandstone broke the 200 well mark for the fourth consecutive year with 220 wells. The productive rate is 58.5%, compared with 55% in 1995 (Table 3 [14436 bytes]). Rose Run sandstone wells were drilled in 14 counties by 59 operators. The most actively drilled Rose Run sandstone county was Coshocton with 27, followed by Pickaway 22 and Perry and Portage 21 each.

Overall, 10 townwhips had first-time producing Rose Run sandstone wells. Well depth averaged 5,501 ft/well, 261 ft deeper than in 1995. This increase resulted in part from drilling in Portage County, where Rose Run averaged 7,472 ft/well.

Some 83% of Ohio's estimated 1,885 Rose Run sandstone wells have been drilled since 1987. Since that year, 1,568 Rose Run sandstone wells have been drilled in 29 counties. As in 1995, a small percentage of Rose Run sandstone dry holes were plugged back to the Clinton sandstone, indicating that most Rose Run prospects are being drilled without the Clinton sandstone as a back-up.

Wells completed to the Cambrian Trempealeau dolo- mite decreased by 10 to 80 wells in 1996. Wayne County (42 wells) remained the most active county. Trempealeau dolomite drilling occurred in 13 counties, an increase of two from 1995. And 49% of all Trempealeau dolomite wells were completed as productive. Well footage averaged 4,807 ft, 108 ft/well more than in 1995.

An estimated 22 wells were drilled to Ordovician Beekmantown dolomite, eight fewer than in 1995. Muskingum County led with 11 wells, followed by Tuscarawas with four. The productive rate was 86%. Well depth averaged 6,263 ft, a decrease of 229 ft/well. Beekmantown exploration is expected to rise this year.

An estimated 37 wells were drilled to the Antrim shale (20) and Ohio shale (17), an increase of 26 wells from 1995. The increase is directly attributed to the exploration of the Antrim shale in Fulton (16) and Williams (four) counties. These shallow wells averaged 526 ft. Wells were drilled in 12 townships to test the potential of the shale.

This play is interesting and different because a potential good gas well initially produces high volumes of water (up to 400 b/d). The high water volume indicates an extensive fracture system. To dispose of produced water, a new saltwater injection well was drilled and put into operation in the Niagaran limestone (injection interval 1,176-1,238 ft. The companies are evaluating the test results.

Over the year, drilling activity was more evenly distributed, averaging 53 wells/ month. October was the most active month with 74 wells, while drilling was slowest in April and May with 38 wells each.

The number of owners drilling wells increased by 10 as an estimated 148 owners drilled wells in 1996. And 88% of these owners (121) drilled 10 wells or less, including 49 who drilled only one well. These 121 owners accounted for 49% of the wells drilled (307). The remaining 16 owners accounted for 51% (323) of the wells drilled. In 1996, the highest number of wells drilled by a single owner was 35.

Ohio has 4,376 registered well owners, including 2,589 domestic owners having wells on their property mainly for their own use, and 1,787 owners with wells in commercial production. In 1996, 375 new owners were registered (170 nondomestic, 205 domestic), and 141 owner files were closed. The division recorded 4,547 changes of well ownership. From 1980-96, the number of producing wells in Ohio increased 71% to 63,870 from 37,296.

Most active counties

Wayne County led the 1996 top 10 list with 54 new wells drilled. Drilling in Stark County increased by 18 wells, moving it into second place. This is the sixth consecutive year that the first-ranked county had less than 100 wells drilled.

Top 10 counties are distributed throughout eastern Ohio (Table 4 [14194 bytes]) in areas where the Clinton sandstone or the Rose Run sandstone are being drilled. Nine of 10 counties retained top 10 status from 1995.

Directional drilling

Directional drilling technology is allowing operators to drill wells in previously inaccessible areas such as acreage covered by water, densely populated areas, and wetlands.

Typically a directionally drilled well is drilled vertically to a predesignated depth, then deviated at an angle designed to encounter the producing formation. Use of this technology has opened additional areas for exploration and development in the more mature regions typical of Ohio.

Before 1989, the division issued fewer than three directional drilling permits per year. Issuance increased to seven in 1989, 14 in 1990, and 41 in 1991. In 1996, 45 directional drilling permits were issued to drill wells in 16 counties.

The most active counties were Trumbull with 12 wells, Summit seven, and Mahoning and Stark four each. Directional drilling permits issued in northeastern Ohio targeted the Clinton sandstone (28), while 12 directional drilling permits targeted Rose Run.

Exploratory wells

Wells are classified as "development wells" or "exploratory wells" based on American Association of Petroleum Geologists guidelines.

A well completed in a known oil and gas bearing formation within 1 mile of any well completed in the same formation is classified as a "development well." A well is classified as an "exploratory well" if it is completed in a formation not usually known to be oil and gas bearing or is located more than 1 mile from the nearest well completed in the same oil and gas bearing formation.

About 25% (155) of all wells completed were classified as exploratory. Seventy-nine exploratory wells were productive and 76 were dry, representing a 51% success rate, 11% better than in 1995. Wells classed as wildcats have the highest risk and had the lowest productive rate (31%). Wells classed as deeper pool wildcats had a productive rate of 49%. Exploratory drilling remained steady in every classification. Some of the more significant exploratory wells drilled in 1996 are highlighted in Fig. 1 and Table 1.

Wells drilled below the Knox unconformity accounted for 85% (132) of all exploratory drilling; 62 of these wells (47%) were productive. The Cambro-Ordovician Rose Run sandstone accounted for 87% of these wells; 43 were productive. The Cambrian Trempealeau dolomite had 31 exploratory tests, of which 13 were productive. Six of the nine exploratory wells drilled to the Ordovician Beekmantown dolomite were productive.

The emphasis on drilling the Knox Group (Beekmantown, Rose Run, and Trempealeau) has resulted in approximately 2.4 million acres (3,750 sq miles) being opened up for exploration. Since 1990, 105 new townships have had Knox discoveries, including Beekmantown in eight, Rose Run in 82, and Trempealeau in 15. These townships cover 22 counties, with the most active being Muskingum 13, Fairfield 11, Hocking and Pickaway eight each, and Holmes and Perry six each. Through early April 1997, three discovery townships have been added.

An interesting example is Atwater Township, Portage County. The first productive Rose Run sandstone well was drilled in 1996. This led to another 14 wells being drilled. Of these, at least two wells had initial production rates of more than 1,000 b/d of oil, and five ranged from 200-400 b/d with associated gas. Gas flows as high as 1 MMcfd were reported.

Rose Run field history

The Rose Run discovery well drilled May 15, 1990, in Randolph township, Portage County, led to drilling of numerous wells the next few years.

These wells were being drilled on geology, not seismic, unlike the majority of the Rose Run sandstone play. The previously mentioned Atwater Township is an extension of this field. Randolph field first produced gas, then oil. The effect can be seen in the recent production history for this township (Table 5 [11003 bytes]).

Production overview

Ohio's total reported crude oil production was 8,305,366 bbl (Fig. 2 [20631 bytes]), an increase of 47,745 bbl from 1995. Daily production averaged 22,754 bbl, compared with 22,624 bbl in 1995. Through 1996, Ohio wells have produced 1,053,488,309 bbl.

Ohio wells produced 120,443,871 Mcf of natural gas, a decrease of 5,892,065 Mcf or 4.7% from 1995 (Fig. 2 [20631 bytes]). Daily production averaged 329,983 Mcf compared with 346,126 Mcf in 1995. Through 1996, Ohio wells have produced 7.2 tcf of natural gas.

The market value of Ohio crude oil increased 18.2% in 1996 to $162,403,129. The average price per barrel was $19.55, a 17.7% increase from 1995's average price of $16.61/bbl (Table 6 [11231 bytes]).

Natural gas production, valued at $313,631,070, increased 7.7% from its 1995 value. The average price paid was $2.63/Mcf in 1996, up 30¢/Mcf from 1995 (Fig. 2 [20631 bytes]). It has become difficult to calculate an "average" gas price because of the wide range of natural gas market choices and sales contracts. Average annual price contracts have ranged from as low as 26¢/Mcf to as high as $4.20/Mcf. For new gas, a trade publication reported the average Appalachian price index was $3.01 for Columbia Gas and $3.26 for Consolidated Natural Gas.

Ohio's combined oil and gas market value increased 11.1% last year. The total dollar value was $476,034,199, the highest market value since 1993.

Acknowledgment

This article is based on the Ohio Department of Natural Resources, Division of Oil and Gas 1996 annual report. The 53 page report is available for $3 from the division at 4383 Fountain Square Dr., Columbus, Ohio 43224.

The Author