Gulfport Energy Reports monster Utica Shale well in Ohio

Gulfport Energy Corp. reported test results on its Shugert 1-12H well in the Utica Shale and announced first sales through the MarkWest Energy Partners LP (NYSE:MWE) Harrison County gas processing complex.

Shugert 1-12 results
The Utica Shale well, in Eastern Ohio’s Belmont County, tested at an average sustained 18 hour rate of 28.5 million cubic feet per day of natural gas, 300 barrels of condensate per day, and 2,907 barrels of natural gas liquids per day assuming full ethane recovery and a natural gas shrink of 10%, or 7,482 barrels of oil equivalent per day.

Utica Shale

Gulfport's Shugert 1-12H well was recently tested following the conclusion of its 60-day resting period. The well was flow tested over 48 hours, reaching an average sustained 18 hour rate of 28.5 MMCF per day of natural gas and 300 barrels of condensate per day on a 32/64" choke and a flowing casing pressure  of 4,208 psi. Subsequent to the test, the 12 hour wellhead shut in casing pressure was 5,250 psi. Based upon composition analysis, the gas being produced is 1204 BTU rich gas.  Assuming full ethane recovery, the composition above is expected to produce an additional 102 barrels of NGLs per MMCF of natural gas and result in a natural gas shrink of 10%. In ethane rejection mode, the composition is expected to yield 41 barrels of NGLs per MMCF of natural gas and result in a natural gas shrink of 2%. Gulfport currently anticipates it will begin flowing the Shugert 1-12 H into a sales pipeline by the end of January.

Gas processing
MarkWest Utica EMG LLC, a joint venture between MarkWest Energy Partners LP (NYSE:MWE) and The Energy and Minerals Group, together with Gulfport have commenced operations of the interim 60 MMCF per day Cadiz refrigeration plant in Harrison County, Ohio. This facility is supported by production from Gulfport's Wagner 1-28H well and Boy Scout 1-33H well.

MarkWest Utica's partnership with Gulfport includes the development of a comprehensive suite of midstream infrastructure in Harrison, Guernsey, and Belmont counties.

In addition to the Cadiz refrigeration plant and initial gathering pipelines, MarkWest Utica is constructing a 125 MMcf/d cryogenic processing plant, Cadiz I, which is expected to be completed by the first quarter of 2013. An additional 200 MMcf/d cryogenic plant, Cadiz II, is planned to be operational by the third quarter of 2013 to support Gulfport's Utica Shale production. By the beginning of 2014, MarkWest Utica is expected to construct up to 140 miles of gathering pipeline and associated compression for Gulfport's planned drilling program of 50 gross wells in 2013. 

Analyst comments
“The Shugert well is a monster and another positive event for Gulfport as the company continues to derisk its Utica acreage. The midstream progress helps alleviate questions about infrastructure and takeaway constraints as continued progress on this front will allow the company to work toward developing its acreage. The final remaining question, likely only to be settled after GPOR hooks up its wells and flows them in a manner consistent with full production, is what the medium- and long-term production profiles of these high-rate wells will be,” said Global Hunter Securities analysts following the announcement.

Gulfport (Nasdaq: GPOR) has a 50% working interest in its 128,000 gross Utica acres (64,000 net) and acts as the operator of its Utica position. Wexford Capital owns the other 50% of the position.

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