Encino expanding footprint in Utica Shale with $300 million investment

By Carol McIntire

Editor

Encino Energy (EAP Ohio) is producing over half the oil in Ohio, according to first quarter 2024 figures released recently by the Ohio Department of Natural Resources Division of Oil and Gas.

Oil production from Encino represented 51.3 percent of all Ohio Utica Shale oil production during the first period. The percentage translates into 3,708,011 barrels of oil in the first quarter. 

According to Ray Walker, Encino chief operating officer, Encino recently received an investment that will allow the company to expand its footprint in the Utica and Point Pleasant shale regions by securing leases on additional land.

The Canadian Pension Plan Investment Board (CCPIB), which is the major backer of Encino, announced an investment of $300 million in the company to support its accelerated development in the shale plays.

“We are very excited about the investment, and they are excited about the potential upside and opportunities in this play and are willing to put more money in to help us grow bigger to capture a lot of this opportunity,” Walker said on a recent visit to Carrollton. Welker has nearly 49 year’s experience in the oil and gas industry and says this is the most exciting times of his career.

“The Utica oil play is sort of the last big frontier as far as shale plays in the U.S.,” he said. “Our asset is really big in this area because of the early days and previous owner (Chesapeake) leased up all over. So, we already have a big footprint and now we are basically filling in and expanding our opportunity. We needed some capital to grow this thing bigger. This investment shows how confident they are in us to do that.”

Encino has about 1.1 million acres under lease at the present time in the Utica Shale play, which makes the company the largest leaseholder.

“We are the largest by a long shot,” Walker noted. 

Ascent Resources was the next closest oil producer the first quarter with 21.8 percent (1,576,362 barrels) in the first quarter.

Encino’s Burdette wells in Harrison County took the top five slots in the first quarter in oil production, led by the 201M well which produced 139,413 barrels. Encino owns 16 of the top 25 wells in oil production during the first quarter.

The Oliver CR 201H well was the top producing oil well in Carroll County with 62,459 barrels (18th on the top 25 list). Two other Oliver wells made the top 25 list along with two Timberwolf wells in Carroll County. 

Harrison County ranked first in oil production for the first quarter with 2,283,645 barrels (31.60%), followed by Guernsey County, 1,903,902 barrels (26.34%) and Carroll County 1,897,061 barrels, a close third at 26.25%.

Walker said when Encino bought the asset and took over in 2018 and early 2019, we always had had designs on moving to the up-dip portion or kind of the western edge of the Utica play. 

“The play is not the same everywhere,” he noted. “The east side is dry gas, and the west side is oil. We always had designs on moving out to the west side and testing the oil play because we, and others, believed this could be a big commercial oil play.”

In 2021, the company began drilling in earnest in the oil play and gradually directed more of the program to the oil play. Today, he said, the company is about 98 percent focused in the oil play. 

“We are now over 200 wells, all very successful, and now produce more than half the oil in the state,” Walker stated.

The company has been operating with three rigs in the play. Walker said a fourth will be added this July. 

“The additional rig will make us one of the biggest, if not the biggest, operator in all of Appalachia,” said Welker. “We are really excited. It’s the real deal. We are over 200 wells in without a failure.”

He sees the wells lasting 75 to maybe 100 years. He backed the statement by saying there are shale wells in Kentucky that are over 100 years old. 

Looking into the crystal ball as to what the future holds for Carroll County and the surrounding areas in relation to the oil and gas play, Walker, said it comes down to economic impact.

“A lot of money has been injected into the community and jobs created and, in many cases, careers. At Encino we have a policy of using local vendors whenever possible. We have a lot of probably 200 vendors which are Ohio based. We are the only company that can say 100 percent of our casing comes from Ohio (Youngstown).”

He believes the company has built a solid reputation, based on safety and being environmentally sound. 

“The message is, we want people to call us,” Walker noted. “We are interested in leasing. We think we’re different and landowners will get more value for their minerals by leasing with the company. 

Jackie Stewart, director of External Affairs for Encino, noted the company is leasing land on a more aggressive basis than ever before. 

“We are filling in the gaps,” she said. “We are looking for the 5–10-acre pieces of land. We are ready to take calls from landowners and will be transparent with them. If their land is not in our area, we will let them know upfront. However, if we lease you, we are going to drill.”

The Utica Shale formation stretches from Mahoning to Noble counties.

 Natural gas 

production

Ascent Resources Utica, LLC, led all of Utica in natural gas production with 42.8% in the first quarter. That percentage translates into 228,496,843 MCF of natural gas. Gulfport Energy was in the second place slot with 17.6% (93,971,805 MC) followed closely by Encino with 15.96% (85,219,965 MCF). 

The top two gas producing wells in the state, owned by Ascent Resources, are located on the Ruth C MTP pad in Jefferson County. The top well produced 3,710,969 CF of gas and the second well 3,287,230 CMF. There were no Carroll County wells in the top 25 in gas production.

Belmont County ranked first in natural gas production from the 18 counties in the Utica Shale region with 158,187,102 MFC (29.62%). Jefferson was second with 119,621,396 (22.4%) while Carroll County produced 29, 863,643 or 5.59 percent.