Utica Holdings in Guernsey, Harrison, and Noble Counties of Northeastern Ohio Being Sold
From Article by Edd Pritchard, Canton Repository, August 10, 2013
EnerVest announced it has a buyer for 22,535 acres of the more than 100,000 acres of Utica Shale leases it has been trying to sell.
But the company also is looking at forming joint ventures to drill in the volatile oil window in Stark and Tuscarawas counties.
The company revealed the pending sale and other Utica plans as it announced second quarter financial results for its EV Energy operation.
EnerVest didn’t name the buyer and said the deal should be completed in the third quarter.
It’s a $284.3 million deal, with a per acre price of $12,900. The acreage is in Guernsey, Harrison and Noble counties, where other companies are seeing strong liquid natural gas production from Utica wells.
John P. Walker, chairman of EV Energy, said the Utica lease sale is a good first step in EnerVest’s revised acreage sale process. The company has been trying to sell its Utica holdings since late last year. Efforts to sell the 103,800 acres — including acreage in Stark County — to a single buyer broke down, so EnerVest opted to sell smaller sections.
Walker told oil industry stock analysts that EnerVest and EV Energy are negotiating with service companies and “technically confident oil shale experience producing companies” about forming two small joint ventures for wells in Tuscarawas and Stark counties.
The company has drilled several horizontal wells into the Utica Shale, including wells in Lexington and Bethlehem counties, but last year opted to sell much of its Utica holdings and focus on drilling conventional wells into other formations.
EnerVest also touted early success at the Utica East Ohio gas processing operation that began operating in June. The Kensington facility has capacity to process 200 million cubic feet of natural gas per day and already is processing 85 million cubic feet per day. EnerVest owns a minority stake in Utica East Ohio and the Cardinal Gas Services gathering system that moves gas from wells to the processing centers.
Revenue from selling the acreage and the processing facilities will be a factor during the third and fourth quarters. For the second quarter, which ended June 30, EV Energy reported net income of $32.9 million, or 74 cents per share, compared with $15 million, or 35 cents per share, in 2012. Profits came on revenue of $81.6 million, up from $63.6 million last year.
For the first half, EV Energy is carrying a $13.7 million loss, compared with 2012 profits of $43.5 million. Revenue is $153 million, compared with $139.6 million a year ago.
EV Energy is the publicly held portion of EnerVest, which ranks as one of Ohio’s largest oil and gas companies. EnerVest has offices in Suffield Township and operates 8,700 producing wells around the state, including 1,800 in Stark County.