By CASEY JUNKINS
ST. CLAIRSVILLE, Ohio - Despite Gulfport Energy's $157 million loss from July 1 through Sept. 30, the company joined fellow frackers Consol Energy and Rice Energy to continue increasing natural gas output in eastern Ohio's Utica Shale field.
During the third quarter, Consol's Utica production reached 22.5 billion cubic feet of natural gas, which is a 47 percent increase from the amount the company extracted during the same period in 2015.
Most of Consol's Utica operations are in Monroe County. The company expects to drill nine dry Utica wells in the county before the end of the year at a cost of about $9.3 million each, assuming an average horizontal leg of about 1.8 miles.
"With a track record over the past three quarters of reducing debt through generating total free cash flow of approximately $608 million, and, beginning this quarter, restarting drilling activity in the dry Utica in Monroe County, Ohio, our focus remains unchanged: continue to generate free cash flow and prudently allocate capital with the goal of increasing our company's net asset value per share over the long-term," Consol President and CEO Nick DeIuliis said.
"Our extensive database allows us to create a detailed geologic earth model, perform hydraulic fracture modeling and then production modeling in one package. This allows us to rank these dozens of locations to create a heat map of the Utica. Each new data point we get helps us to paint a clearer picture of the play and has confirmed our enthusiasm for the Utica and Consol's future within it," Consol Chief Operating Officer Tim Dugan added.
For the quarter, Consol earned $163 million, compared to $110 million during the same period in 2015. The company is also dissolving its five-year partnership with Noble Energy to develop approximately 670,000 shale acres in West Virginia and Pennsylvania, as each firm will now tend to its own operations.
"Noble has been a top-notch partner, and we have enjoyed the collaborative relationship that we have shared over the past five years. Even though we have seen much success together, we have agreed that we must both have the ability to adapt to a changing energy landscape," DeIuliis said.
While most of Consol's Ohio operations are in Monroe County, Rice and Gulfport work more in Belmont County. Including the $157 million from the third quarter, Gulfport has posted net losses of $739.3 million for the year so far. Company CEO Michael Moore, however, does not seem overly concerned.
"Gulfport had a solid third quarter across the board, demonstrating our commitment to deliver on expectations. I am very proud of the continued hard work and commitment of all teams across the organization who came together to deliver these strong results and am encouraged by our momentum as we head into 2017," he said.
During the third quarter, Gulfport produced about 713 million cubic feet per day from the Utica, reflecting an 14 percent increase from the the same term in 2015.
"We currently are utilizing four rigs and have already contracted two additional rigs, one of which is currently moving to location and the other rig is scheduled to begin operations in December," Moore said.
As for Rice, third quarter production increased 23 percent over the prior year quarter to an average of 747 million cubic feet per day. The company known for naming its wells for monster trucks such as Razin' Kane and Krazy Train turned on 11 new wells during the term. The driller now controls roughly 59,000 acres in Ohio, with the vast majority of this in Belmont County.
"Our third quarter results reflect continued execution of our returns-focused strategy, as we further increased efficiencies and reduced development costs, while protecting the balance sheet," Rice CEO Daniel J. Rice IV said. "We continue to be well-positioned to benefit from an improving price environment, which positions us for continued success in 2017."