It has been an exciting and active few years in the Ohio oil and gas industry, whether you are a landowner, driller, producer, supplier or in the professional services industry. Significant economic activity has and continues to occur in the manufacturing, transportation, hospitality and field services sectors, as well.
A few significant examples of infrastructure investments in various stages of planning, development and operation include; Vallourec & Mannesmann’s $650 million steel pipe mill in Youngstown, US Steel’s $100 million mill in Lorain, Timken’s $200 million expansion in Canton, Range Resource and Mark West’s announcements of natural gas processing plants estimated at $1 billion. There are many more examples of smaller scale investments being made in various counties in Eastern Ohio.
Governor John Kasich continues his focus on the industry proposing, once again, a revamping of Ohio’s severance tax structure, away from a volume-based calculation to a percentage of revenues derived from the production of natural gas, oil and natural gas liquids. The Governor’s proposal focuses on horizontally drilled wells and increases the rate after an initial production period. It promises to be a spirited debate at the statehouse as the budget process plays out over the coming months.
Transitioning from the lease acquisition to the drilling/production phase continues to evolve. It is interesting to compare the activity over the last two years as provided by the Ohio Department of Natural Resources, Horizontal Utica - Point Pleasant Well Activity in Ohio reports posted to its website. The table below portrays various stages of well activity through February 2011, 2012 and 2013:
E&P companies are required to report production data annually in March. We will report that information in a future Insight. Stay tuned.
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