ENSERVCO Corporation, a provider of well-site services to the domestic onshore conventional and unconventional oil and gas industries, announced it will be working under master service agreements (MSAs) with five major exploration and production companies targeting eastern Ohio's Utica Shale formation. Preliminary work with three of the companies has already commenced, although most services are expected to begin in January 2013. Primary services covered under the MSAs include frac heating, hot oiling, pressure testing and water hauling.
Eastern Ohio is one of ENSERVCO's newest operating regions, and the latest customers, which include four of the five largest operators in the Utica, represent a significant incremental growth opportunity. Recent studies by Ohio's Department of Natural Resources suggest the Utica Shale has the potential to become one of the United States' most prolific oil and gas plays, and could ultimately generate up to 5.5 billion barrels of oil and 15.7 trillion cubic feet of natural gas production, assuming a 5% rate of recovery. Several exploration and production companies have announced aggressive development programs for the Utica, including Gulfport Energy, which recently said it has budgeted $215 million to $225 million for drilling activities during 2013 alone.
Rick Kasch, president and CFO, said, "We expect to see consistent demand for our core fluid heating services in this region throughout the fall, winter and spring, as hydraulic fracturing techniques in the Utica generally require frac water to be approximately 65 to 70 degrees Fahrenheit. Average monthly temperatures in eastern Ohio reach this level for only three or four months a year.
"In addition to our early mover advantage in the region, our modern equipment fleet and reputation for outstanding service position us to benefit from the anticipated long-term production growth associated with this field," Kasch added.
The Company currently is serving the Utica Shale region out of its Carmichaels, PA operations center, which opened in 2010.
Kasch noted that ENSERVCO also will soon commence frac-heating services for one of the largest exploration and production companies targeting the burgeoning Mississippi Lime formation in southern Kansas. The operator is already utilizing ENSERVCO's water hauling, pressure testing and well acidizing services.
ENSERVCO also announced it recently commissioned the fabrication of several next-generation, double-burner heating units (include picture) that are expected to collectively increase the Company's frac heating capacity by approximately 50%. When completed, ENSERVCO expects to deploy the units primarily in the Company's Rocky Mountain and Northeastern U.S. service territories -- regions abundant in oil and natural gas liquids. All units are expected to be operational by the first quarter of 2013.
