A Denver, Colo.-based company plans to begin a horizontal shale drilling operation in Adams Township by the end of this year.
Petroleum Development Corp. (PDC) Energy, which also maintains an office in Bridgeport, W.Va., issued a press release Wednesday stating that the third of three horizontal wells being drilled in southeast Ohio would be located in northern Washington County.
The first two wells have already been drilled in Guernsey County.
The (Washington County) well will be the first horizontal well drilled in the company's southern acreage, and first sales from the three horizontal wells are anticipated in the second quarter of 2013, according to the release.
"Our plan is to spud (begin drilling) that well in the fourth quarter of this year-these are the first horizontal wells we've drilled in that area of Ohio," Ron Wirth, director of investor relations for PDC, said from the Denver office Wednesday morning.
He said the company has drilled some vertical test wells previously in Belmont and Morgan counties to obtain core samples from the geological formations.
Fact Box
About PDC Energy
PDC (Petroleum Development Corp.) is an independent energy company engaged in the development, production and marketing of natural gas and oil.
PDC's operations are focused primarily in the Wattenberg Field of Colorado, including the horizontal Niobrara and Codell, the Utica Shale in Ohio and the Marcellus Shale development in West Virginia.
PDC is included in the S&P SmallCap 600 Index and the Russell 3000 Index of Companies.
Source: PDC Energy, Inc
"We've been looking at the Utica shale play in the southeast portion of Ohio early on. And the company has been drilling in the Appalachian Basin for more than 40 years," Wirth said. "We currently have approximately a total of 45,000 net acres located in Morgan, Noble and Washington counties."
He said the company was initially seeking a joint venture partnership, but later decided to develop the acreage on its own.
PDC expects to invest $50 million in the Utica shale development next year, according to the company news release, which adds that very high initial production rates and high liquids content have been announced from recent well results by other energy companies working in close proximity to PDC's acreage locations.
"We've contacted other counties that have worked with PDC, and are getting good feedback-it seems to be a very reputable company," said Roger Wright, deputy engineer for Washington County.
He said the county and PDC began discussions last week pertaining to the county's Road Use Maintenance Agreement (RUMA), developed earlier this year in anticipation of shale drilling operations coming into Washington County.
By entering into the agreement drilling companies basically promise to repair and maintain roads damaged due to the movement of trucks and other heavy drilling equipment over county roadways.
Wright said Adams Township roads will also come under the county RUMA.
"This will be the first time we've used our road maintenance agreement, and the company had some initial concerns," he said. "They had no problem with fixing the roadways, but they didn't feel it was reasonable to have to stop drilling while they made any road repairs, which was required by the original agreement."
Wright said such issues were negotiable as the RUMA is a flexible document that can be applied on a case by case basis.
"Our road use agreement was patterned from the state's RUMA, but it can be altered by the county," he said. "In fact other counties have made similar adjustments to their agreements."
County engineer Bob Badger noted drilling companies are not required to sign an agreement with the county.
"The state says they have to make a good faith effort to keep the roads maintained," he said. "I would like to have seen a requirement that the agreement be signed before a drilling permit could be issued. But that's not currently required by (Ohio Department of Natural Resources)."
Ohio DNR regulates oil and gas drilling operations within the state.
Badger said PDC vehicles would be using County Road 76, East Branch Road, and Dixon Road in Adams Township.
"The company will have a road consultant making regular checks of those roadways, but we'll also be monitoring the roads, along with township officials," he said.
Wright and Badger accompanied an engineer from PDC on a drive-through of the area Wednesday.
"They'll have survey crews assess the roadways and culverts and do some core borings to help determine how the roads will hold up under heavy traffic," Wright said. "A report will be filed on the road conditions and improvements will be made if needed. Afterward the company will repair any road damage as needed. If any issues come up we'll contact the company and they'll respond."
He said the heaviest volume of traffic could be expected over the two- or three-day period it will take to bring in the initial drilling equipment.
No exact date has been established for the move, but Badger said he understood the company wants to begin development of the operation as soon as possible.
