NEW YORK (AP) -- BP has agreed to lease 84,000 acres of land in northeast Ohio for future oil and gas production, the company said Tuesday.
The land is in the Utica/Point Pleasant shale formation. The Utica Shale lies below the Marcellus Shale, where oil companies have drilled thousands of wells in search of natural gas and, more recently, oil.
BP signed the deal with the Associated Landowners of the Ohio Valley, which represents area mineral owners. Financial terms of the deal weren't disclosed.
"We actually think this has the opportunity to be very good for Ohio, very good for BP," said Tim Harrington, regional president of BP North America Gas, based in Houston. He said the company will sign up leaseholders over the next six months and then conduct an appraisal program to determine the extent of resources. Development and planning will follow.
He said the company was driven to the shale because it offers dry gas and wet gas as well as heavier liquid gas.
"One of the things that we quite like was the potential for the liquids-rich gas opportunity," he said. "We think it has the potential to compete well in our portfolio."
The shale is at a depth of about 6,000 feet. The Ohio Department of Natural Resources estimates there is potential to recover between 1.3 billion and 5.5 billion barrels of oil and between 3.8 trillion and 15.7 trillion cubic feet of natural gas, according to BP.
Harrington said the appraisal process will help determine the economic or take-away potential of the deal.
"This will depend on the nature of the product, how wet, how liquid-based it is," he said. "What we would hope to find is we would have an infrastructure that would build out."
BP seeks to hold both over-mature and young, prospective opportunities, and the move into the Utica Shale is part of that mix, Harrington said.
Currently, BP actively drills across Texas, Oklahoma and Arkansas.