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Sunday, June 23, 2013

Chesapeake Dominates the Utica

Some time ago I reasoned that I was at the age when I should eschew the thrills and risks of the stock market. Lately I made an exception and purchased 100 shares of Chesapeake Energy. It's silly and I know it. Even if Chesapeake appreciates 10 fold it won't make me wealthy. The reason I chose Chesapeake was because it is the biggest player in the Utica Shale and I believe in the Utica Shale. I just want to be on the winning side of what I perceive is nothing short of a revolution. Chesapeake is not the only game in the Utica and the Utica certainly is not the only game in tight oil and natural gas but what was thought to be a lofty political goal a few years ago, energy independence, is quickly becoming an economic reality.

So how well has Chesapeake done in the Utica? Last year the company produced 372,212 barrels of oil and 10.1 million mcf of natural gas last year from 53 wells in the play. As of March 31, it had drilled roughly 250 wells in the play, including 66 producing wells, 87 that are waiting on pipelines, and 97 wells in various stages of completion. On the oil side, Anadarko came the closest to challenging Chesapeake's dominant position, producing 118,726 barrels of oil from its Utica wells while Hess Ohio Resources took second place in gas production, producing 922,979 mcf of gas.
Strictly from the investment perspective there are probably better plays in the Utica than Chesapeake, but it is the biggest if not the best, and if I am going to continue to write optimistically about the Utica I really should put my money in line with my sympathies. After all, I'm not a Democrat.

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