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Wednesday, November 26, 2014
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Published: Wednesday, 4/30/2014 - Updated: 6 months ago

BP pulls out of drilling in northeast Ohio

Company has 105,000 leased acres

ASSOCIATED PRESS

AKRON, Ohio — BP will scrap plans for shale drilling in northeast Ohio because of disappointing results from test wells.

The energy company said in a news release that “as a consequence of its appraisal results,” it was abandoning plans for drilling in the Utica shale and selling off leases in the region.

The company has about 105,000 leased acres in northeast Ohio, mostly in Trumbull County near Warren. The company announced as part of its first-quarter financial results this week that it will write off more than $500 million it has spent there so far.

The company never disclosed what it paid landowners for five years of drilling leases, but published reports at the time estimated the amount at $4,000 per acre.

Texas-based Halcon Resources in March had stopped its drilling in the area because of poor results.

BP has drilled six experimental wells in northern Trumbull County within the last year, and four are now producing. Ohio’s quarterly results released last week by the state Department of Natural Resources, however, indicated poor results, according to the Warren Tribune Chronicle.

The Akron Beacon Journal reported that the Utica shale in the region is rich with natural gas but is lacking liquids that are desired by drillers, especially with low prices being paid for natural gas.

Mike Chadsey, spokesman for the industry group the Ohio Oil and Gas Association, noted that the recent links between hydraulic fracturing, or fracking, and seismic activity may also have been a factor.



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