American Oil and Gas Reporter - April 2020 - 89

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ConventionCoverage: Ohio Oil & Gas Association
Jefferson and Monroe counties, he said.
Oklahoma City-based Ascent Resources-
Utica LLC, the leading Utica producer,
led the pack with 104 completion reports,
up 49%, followed by Gulfport Appalachia
with 50 reports, up 11%, and Encino Acquisition Partners with 38 reports, up 300%,
thanks in part to EAP's acquisition of
Chesapeake Energy's Ohio assets, which
included 747 producing wells, he detailed.
That transaction proved to be the year's
largest, he reported, noting that 3,477 wells
changed hands in Ohio last year.
In 2019, natural gas wells' initial production averaged 14.5 million cubic feet,
up 5%, he said, while oil IPs soared
245%. Harrison County led the state with
average oil IPs of 1,400 barrels a day
and average gas IPs of close to 11 MMcf/d,
Shumway said. Jefferson County followed
with an average oil IP of 400 bbl/d and
average gas IP of 30 MMcf/d, he said.
EAP reported 36 completions with
average oil IPs better than 1,000 bbl/d
and average gas IPs of 15 MMcf/d, altogether averaging 40 million cubic feet of
gas equivalent daily, Shumway detailed.
Ohio operators bored 6.6 million feet
in 2019, compared with 2.7 million feet
in 2005, and the average well's footage
approached 18,000 feet, Shumway said.
Ascent drilled the most footage, more
than 2 million feet last year, a 74% increase, he said.
On The Ascent
As Utica laterals continue to lengthen,
allowing more drilling on state lands
would benefit Ohio and OOGA members
active in the play, said Ascent Resources
CEO Jeff Fisher.
In a question-and-answer session with
OOGA Chairman Steven Downey, Fisher
said access to state lands could help operators assemble drilling units and tap
into reserves with laterals that now occasionally extend as long as 20,000 feet.
Ascent's laterals average 13,000-14,000
feet, he related.
"Being able to lease and transact on
all the tracts that exist out there is a premium, and we have been able to operate
for the most part like that, but today we
are coming upon times where state lands
can be brought into that equation and
generate value for the state and also help
operators continue to operate efficiently,"
he said.
Ascent was formed by the late Aubrey
McClendon after he left Utica pioneer

OOGA Chairman Steve Downey (right) poses a question to Ascent Resources Chief
Executive Officer Jeff Fisher during their conversation at OOGA's 2020 annual convention.
During the discussion, Fisher reported Ascent Resources met its 2019 Utica net production
target of 2 billion cubic feet equivalent a day and a financial goal of $1.2 billion in earnings
before interest, depreciation, amortization and exploration, with the company becoming
free cash flow positive during the fourth quarter.

Chesapeake Energy in 2013, recalled
Fisher, who was on Chesapeake's Utica
discovery team.
Privately-held Ascent started with more
than $1 billion of equity capital and
quickly increased that to $2 billion with
acquisitions in the best parts of the shale
play, he said. When the 2014-15 downturn
hit, the company had growth plans and
limited production but insufficient capital
to develop Ascent's attractive position,
Fisher recalled.
"A lot of people didn't think we would
be able to work through that, but we had
drilled enough wells in the Utica with
outstanding results, and with that we
were able to raise $1.5 billion in 2016 to
re-equitize our business," he reviewed.
"In 2017, we put that capital to work and
knocked it out of the park."
In 2019, Ascent achieved a Utica production target of net 2 billion cubic feet
equivalent a day and a financial goal of
$1.2 billion in earnings before interest,
depreciation, amortization and exploration,
Fisher said, with the company becoming
free cash flow positive during the fourth
quarter. Being well hedged undergirded
strong results last year, but 2020's depressed commodity prices and tepid capital
markets are challenging, he acknowledged,
putting free cash flow positive companies

in the most desirable financial position.
"It is a good thing for our industry
right now to have to be self-reliant and to
curb that growth and really focus on generating returns," Fisher suggested.
Despite its reputation as chiefly a
gas play, the Utica provides diversity
for companies that focus on it, Fisher
said, thanks to lucrative windows for
gas liquids and oil, which provide drilling
options for single play companies such
as Ascent.
Consolidation will pick up in the current soft market, he predicted. The majors
have focused chiefly on the Permian and
not Appalachia, Fisher observed, but a
number of large and successful companies
are active in the region.
r

Coming In May
The Golden State's oil and gas industry has a long and proud history
as one of the country's most prolific
producing provinces. The May issue
of The American Oil & Gas Reporter
will take a closer look at the state's
independent oil and gas producers by
offering an in-depth issues update
about the California Independent Petroleum Association.
APRIL 2020 89

American Oil and Gas Reporter - April 2020

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