Utica Shale - Not So Sweet Spot Gas Wells Completed in Otsego County L. W.

Allstadt 10/3/2012 The well data for Otsego County suggests anything but a Utica shale sweet spot. The USGS analysis of the Utica shale seems to include areas that have very low EURs. The minimum needed to be included in the sweet spot is 0.2 billion cubic feet of gas estimated to be ultimately recoverable. At $5 gas such a well would produce only $1 million total revenue. That is hardly enough to cover the cost of the well. Even at $10-15 gas the economics would be difficult to justify drilling. The average well included in the hot spot has 0.619 billion cubic feet EUR. That average well would produce about $3 million worth of gas over the life of the well at $5 gas. Again, that is not nearly enough to justify drilling. See table 1 in the USGS update for more details on how they calculated the not so Sweet Spot. Any areas where the top of the Utica formation is less than 2000 feet would not be drillable under the DECs dSGEIS. To get data for the top of the Utica formation it is necessary to add the formation thickness to the formation depth and interpolate the curves. That shifts the depth curves to the south in the county (The old maps show the favorable areas further north than they should be). There is also a practical minimum depth to achieve sufficient pressure - that is probably around 4000 feet. Since 1952, the earliest date for which the DEC reports gas well data in Otsego County, there have been 13 gas wells completed in the County. All of these wells were vertical wells and all were plugged and abandoned. The ten earlier wells are all described as dry wildcats (dry meaning that no commercial quantities of gas were encountered and wildcat meaning that these were exploration wells with little or no information available from nearby wells). Even without fracking in the shale layers, there would have been short periods of high pressure if enough gas had been present. The three most recent wells are described as Gas Development Wells, based on the information provided by Gastem, the operator. A development well is normally defined as a well drilled to a known producing formation in an existing oil field. It is a well drilled within the proved production field or area of an oil or gas reservoir to the depth of a stratigraphic horizon
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known to be productive. It could be argued that these three wells were really wildcats, similar to all the other wells in the county as there had been no successful wells in the area previously. Gas was only produced briefly, for ten days, from one of those wells. That well produced for the ten days at a rate of 35 mcfd according to the DEC data, which would be worth about $100 per day (less than $40,000 dollars a year) at $3.00 per mcf. Gastems three wells were also plugged and abandoned, and little has been heard from the company since. (Note: Gastem put all of their Otsego County acreage up for sale with no takers. JLN) The County has been fairly covered with test wells during the last 60 years with one well each in the towns of Burlington, Cherry Valley, Laurens, Morris, Pittsfield, Springfield, Unadilla and Worcester and four in the Town of Maryland. A few other well were started but never completed and provide no useful data. The following table contains direct excerpts from the New York State DEC Searchable Well Data Base. The last column is estimated based on the layers that a well would likely pass through to reach the total depth. Latitude/Longitude coordinates for each well are provided in the DECs database for anyone with an interest in mapping the exact locations. (Note: Karen Edelstein is in the process of mapping test wells in Otsego and Chenango County. JLN)

GAS WELLS COMPLETED IN OTSEGO COUNTY

Town Well Name Matteson Emma 1 Lum Paul B et al 1 Baum Edwin F Sr 1 Russ W G 1 Burkard Ludwig et al 1 Schwerd Frederick W 1 Company Name Well Type Well Status Plugged and Abandoned Plugged and Abandoned Plugged and Abandoned Plugged and Abandoned Plugged and Abandoned Plugged and Abandoned Plugged and Abandoned Plugged and Abandoned Well Completion 12/15/1952 2/3/1961 Drilled Depth 2450 5511 Shale likely tested* Marcellus Marcellus and Utica

Morris Worcester

Blue Rock Drilling NYS Natural Gas Corp. NYS Natural Gas Corp. NYS Natural Gas Corp. NYS Natural Gas Co. CNG Transmission Corp. Amoco Production Co. Amoco

Dry Wildcat Dry Wildcat

Maryland Maryland

Dry Wildcat Dry Wildcat

2/15/1963 9/30/1963

3406 3526

Marcellus Marcellus Marcellus and Utica

Maryland

Dry Wildcat

1/8/1965

5118

Burlington

Dry Wildcat

11/5/1973

2723

Marcellus Marcellus and Utica Marcellus and Utica

Morris Laurens

Bellows 1 Hoose 1

Dry Wildcat Dry Wildcat

5/20/1974 6/15/1974

3980 5824

Unadilla Springfield Cherry Valley Maryland

Johnson 1 Pullis 1 Sheckells 1 Ross 1

Production Co. Amoco Production Co. Gastem USA Inc. Gastem USA Inc. Gastem USA Inc.

Dry Wildcat Gas Development Gas Development Gas Development

Plugged and Abandoned Plugged and Abandoned Plugged and Abandoned Plugged and Abandoned

6/26/1974 7/28/2007 9/27/2007 11/11/2009

5839 2605 2950 4950

Marcellus and Utica Marcellus and Utica Marcellus and Utica Marcellus and Utica *Based on DEC well data when reported or SGEIS depth charts.

LWA 10/3/2012