It's Now Clear A Single Energy Company Will Dictate The Fortunes For Much Of Ohio

chesapeake energy

We recently met with a delegation from Ohio to discuss how Buckeye staters have benefitted from oil and gas production from the Utica shale formation, on which they sit. 

Of course, the state has long suffered from the decline of its industrial manufacturing base.   

But the delegation cited a study from research group IHS suggesting the Utica could generate 143,000 and generate $18 billion for the economy. 

And one company is overwhelmingly responsible for developing those resources: Oklahoma City-based Chesapeake Energy.

According to a new report from the Ohio Department of Natural Resources, the company was responsible for 2/3rds of documented shale wells drilled in 2012 — 53 of 85.

Compare this with Pennsylvania, where dozens of different companies have drilled the more than 2,300 wells in the Marcellus Shale.

Here’s another view, showing all Utica permits through December, via Fractracker:

utica permits OP 08132012

Until recently, relying on this particular company might have spelled trouble — longtime CEO Aubrey McClendon was forced to step down after a series of reports about conflict of interest — analysts now say its outlook has stabilised.

And the company’s stake in the state is set to grow even further, according to the Akron Beacon:

Chesapeake had said earlier that it expects to quadruple its Ohio production by the end of 2013 with the completion of pipelines and processing plants that will allow more wells to be hooked up plus new wells drilled in 2013.

The company was basically first into the area, and so its vaunted “land machine” was able to snap lots of potential production areas.

Ohio’s unemployment rate is now lower than the rest of the country’s:

ohio versus national unemployment

It’s now clear that trend will to a significant degree depend on Chesapeake’s fortunes.

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