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Natural Gas Pumped From Ormet Property

December 24, 2013
By CASEY JUNKINS Staff Writer , The Intelligencer / Wheeling News-Register

HANNIBAL - When Wayzata Investment Partners offered $221 million for bankrupt Ormet Corp. this year, part of the new business plan involved eventually powering the aluminum smelter plant with natural gas drawn from the Hannibal property.

Ormet's future is uncertain, as Wayzata did not purchase the company once the aluminum firm did not get as much of an American Electric Power rate reduction from the Public Utilities Commission as Ormet officials said they needed to complete the Wayzata deal.

However, three Marcellus and Utica shale wells drilled on Ormet's land directly across Ohio 7 from the Hannibal plant are now pumping a total of nearly 11.7 million cubic feet of natural gas daily, according to Houston, Texas-based Magnum Hunter Resources.

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Photo by Casey Junkins
Magnum Hunter Resources is producing nearly 11.7 million cubic feet of natural gas per day from three wells on Ormet Corp. property directly across Ohio 7 from the smelter plant.

Magnum Hunter is the parent company Triad Hunter, which drills and fracks wells in the Upper Ohio Valley, as well as Eureka Hunter, which processes and transports natural gas via pipelines.

"Magnum Hunter's focus continues to be in accelerating our leasehold ownership position and adding new production in both the Marcellus and Utica resource plays. Our newly completed wells in the Marcellus continue to improve both in overall gas production volumes and liquids recovery," Magnum CEO and Chairman Gary Evans said.

According to Magnum, Triad Hunter drilled three wells on the Ormet pad. Approximate daily natural gas production rates for each of the three wells are: 2.68 million cubic feet per day, 5.1 million cubic feet per day and 3.88 million cubic feet per day.

In addition, Magnum states the wells are producing about 1,788 barrels of natural gas "condensate" per day.

Condensate is a hydrocarbon liquid dissolved in saturated natural gas that comes out of solution when the pressure drops below the dewpoint.

"The bulk of this is gathered at the well pad. Some of it drops off into the pipeline, while some drops off in compressor stations," Paul Weissgarber, senior vice president of Crosstex Energy said of condensate, further referring to the material as "a very light oil."

Eureka Hunter is now installing gathering pipelines, which are about 80 percent complete, to connect these wells to the transmission pipelines - which will allow them to get the gas to market.

"We continue to be impressed with the quality of these reservoirs, which seem to get better with time," Evans added.

Although company officials at Ormet have been unavailable for comment, the bankrupt firm should be receiving production royalties for gas drawn from its property. Lease contracts throughout eastern Ohio have paid from as low as 12.5 percent to at least as high as 20 percent.

 
 

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