New Orleans (Platts)--29Mar2012/219 pm EDT/1819 GMT

The first well of one of the Utica Shale's first movers, Oklahoma City-based Gulfport Energy, has completed its vertical stage and has started a horizontal lateral, Gulfport Chief Financial Officer Michael Moore said Thursday in New Orleans.

Located in the oilier window of the play in Harrison County, Ohio, Gulfport's first well will be one of 20 planned for this year at a total cost of around $74 million, Moore said.

Unlike many other shale pioneers, Gulfport is an oil producer who picked up 125,000 gross acres in Ohio, mostly targeting the Point Pleasant part of the Utica, which is a deeper level of the shale.

"We like to try to be early to plays," Moore said. He said Gulfport's acreage is in the "heart of the play" and his presentation showed planned wells in the eastern Ohio counties of Harrison, Belmont and Guernsey surrounded by wells of producers such as Chesapeake, Hess, XTO and Consol Energy.

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Moore said Gulfport has identified 781 Utica drill locations and plans to construct "super" well pads with three or more wells per pad.

He said the Utica compares "favorably" with Texas' Eagle Ford Shale and his company expects to spend $7.5 million per Utica well and recover 500,000 barrels of oil equivalent/well.

Gulfport enjoys being in a crowded neighborhood, Moore said. "We leverage all the experiences of others."

Moore said Gulfport plans to drill in the oily Utica window and eventually get well costs down to $6.5 million/well as they gain experience in the Utica.

Moore was reserved when it came to announcing the results of that first well. He said he was well aware the market likes data but called it "dangerous" to announce the IP rate of one well. By the second quarter of this year, he said, Gulfport will have two or three wells and a number of days of production data, but may still announce something about the Utica in May.

Moore said he didn't expect any midstream infrastructure issues for Gulfport in the Utica; enough midstream companies are building pipe fast enough for takeaway capacity to be a nonissue for Gulfport.

Gulfport, with a $1.7 billion market capitalization, has conventional wells in Louisiana that produced 2,111 boe/d, 97% oil, with low per-well costs. The cash from these legacy plays is financing not only Gulfport's Utica shale oil project, but projects as diverse as Canadian oil sands, Permian Basin shale oil and offshore exploration in Thailand.

--Bill Holland, bill_holland@platts.com

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