American Oil and Gas Reporter - April 2019 - 114

ConventionCoverage: Ohio Oil & Gas Association

Explaining Encino Energy LLC's $2 billion acquisition of more than 900,000 net acres
in Ohio's Utica Shale from Chesapeake Energy are from left, company Chief Operating
Officer Ray Walker and Chief Executive Officer Hardy Murchison. Ohio Oil & Gas Association's President Steven Downey (right) moderated the panel discussion held during
OOGA's annual convention, held March 6-8 in Columbus, Oh.

pleted in the Point Pleasant and learned
from that, and we are starting to learn
from our own wells now," he said. "It is
clear that how much a lateral actually
stays in its zone really impacts production.
It is clear that, generally speaking, more
slickwater fluids and more proppant are
real positive, but as we refine that, we
are finding ways to make more productive
wells but also less expensive wells."
As Encino moves ahead on its data
collection and analysis, Walker said its
engineers would focus on improving each
well's technical designs, which typically
meant more volume and proppant, and
different stage spacing, depending on rock
parameters. He noted that the company
began its drilling and completion operations
on Feb. 1, with the first rig setting a record
1,000 feet past the previous mark on its
first day of operations, and the second
day's effort drilling more than 6,000 feet.

was a deal to be done on a great asset
managed by great people, with the opportunity to make it better," he described.
Looking ahead, Hardy predicted that
consolidation would become the Appalachia Basin's dominant business theme.
He pointed to the number of relatively
small companies in the Utica at a time
when economies of scale called for larger
operations. "These pads in Ohio now
look like offshore platforms in the Gulf
of Mexico from 30 years ago. It is a bigboy business. I think the pressures to
consolidate are real," he offered.
In addition, he said, many of the
owners of those private companies don't
have enough capital or time to properly

Operating In Ohio
After Encino formed eight years ago, it
began considering where to acquire assets,
Hardy recounted. After looking at every
U.S. major onshore resource play, it decided
Ohio checked every box on its list.
"You start with the state: It is a great
pro-business environment, with a great
population of hardworking, well-educated
people. It has a huge resource in place in
the Utica that, until now, had been overlooked while the Marcellus and the Permian were getting a lot more attention.
In Chesapeake, we found a counterparty
that had done a fantastic job of assembling
a great position, but for its own reasons
needed to focus elsewhere. And so there
114 THE AMERICAN OIL & GAS REPORTER

develop their holdings, with private equity
funds increasingly ready to move on to
their next investments, while in the public
markets, investors were signaling they
clearly wanted larger, better capitalized
companies that were focused not only on
growth, but on shareholder returns.
"That translates to a consolidation of
a lot of the smaller companies and a few
bigger ones. We think Encino is better
positioned to participate in that than just
about anyone, given the way we have
built our business, the way we are executing our business, and the way we capitalize it with our partners," he said.
According to Walker, Encino had moved
up the learning curve for technological
improvements, and was targeting small
tweaks in areas such as water chemistry.
"In reactions to the rock, the Point
Pleasant is not as critical as some of the
shales that you hear about in the Eagle
Ford and West Texas, or even the Marcellus," he described. "But there will be
a few things on the chemical side you
can do. The good news is this basin is
pretty well delineated; everyone has pretty
much staked out a position. I think what
you are seeing now is companies beginning
to cooperate better technically."
Communication Tools
In a panel discussion on community
relations moderated by Tracy Stevens, Dominion Energy's external affairs manager,
Karen Matusic, manager of public and
government affairs, Appalachia District for
SEE BASIN PAGE 125

Participating in the Ohio Oil & Gas Association's panel discussion on effective community
relations are, from left, Tracy Stevens, Dominion Energy's external affairs manager, who
served as moderator; Karen Matusic, manager of public and government affairs,
Appalachia District for XTO Energy, an ExxonMobil subsidiary, and Allen Fore, vice
president of public affairs at Kinder Morgan.
American Oil and Gas Reporter - April 2019

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