BP to Sell Trumbull Utica Assets
Less-than-stellar drilling results in northeast Ohio and opportunities elsewhere were two of the reasons cited by BP about its plans to sell off the 85,000 acres of mineral rights it holds in Trumbull County and pull out of the Utica Shale.
BP’s announcement, anticipated for some time by those related to the industry, came earlier this week as part of the company’s first quarter earnings report to investors.
The company will begin marketing the mineral rights it spent more than $300 million to lease in 2012.
Promises of royalties upwards of 18 percent on the natural gas and oil minerals retrieved from the Utica Shale formation, however, have fallen by the wayside.
BP – which has no wells in Columbiana County – 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 Ohio Department of Natural Resources, however, indicated poor results.
The company is the second horizontal drilling operator to pull out of Trumbull County. Halcon Resources, which has three Utica Shale wells producing in Trumbull County, also announced last month it was pulling out of the Utica Shale play with no immediate plans to return.
“Based on these results and opportunities elsewhere in its global portfolio, BP has decided not to pursue further development of its leasehold position in the region and will market the assets for sale,” BP said in a statement released by company spokesman Curtis Thomas. “While we determined that other investment opportunities in BP’s global portfolio were better positioned to compete for capital, these leaseholds have potential for another company.”
Mike Chadsey, spokesman for the Ohio Oil and Gas Association, said the recent links between hydraulic fracturing and seismic activity may have been a factor as well.