Wells operated by a half-dozen E&Ps in eastern Ohio’s Utica Shale are now churning out more than 100 Mb/d of superlight crude oil — aka condensate — more than twice as much as they were just three years ago, and there’s talk that condensate production in the play’s “volatile oil window” could increase significantly over the next few years. This surge in condensate output raises three relevant questions: (1) how is the condensate being transported to market, (2) where is it headed and (3) what is it being used for? In today’s RBN blog, we continue our series on Utica condensate with a look at the approaches used to transport the commodity to refineries and others in the Midwest and points beyond.
Canadian crude output is rising, requiring new export routes. As traditional pathways face constraints, the U.S. Rockies—especially the Guernsey, WY hub—are emerging as key corridors for moving Canadian heavy crude to downstream markets, including the Gulf Coast.
As we said in Part 1, five counties in eastern Ohio have been generating fast-increasing volumes of crude oil, almost all of it “light condensate” with an API gravity of 55 to 59 degrees (and sometimes as high as 65 or even 70 degrees), but with a rising share of “heavy condensate” (API of 50 to 52) that is more like a super-light crude and therefore more desirable to some refiners. In November 2024 (the latest data from EIA), Ohio produced a record 120 Mb/d — 140% more than in November 2021 — with another 46 Mb/d produced in Pennsylvania and West Virginia. And the buzz among E&Ps and market watchers in the play is that Ohio production alone may well rocket past 150 Mb/d and even 175 Mb/d or 200 Mb/d over time.
That optimism is reflected in the results of the January 30 initial public offering (IPO) by Infinity Natural Resources (NYSE symbol: INR), which valued the seven-year-old company at a heady $1.3 billion. Infinity, which has both condensate- and natural-gas-focused assets in the broader Marcellus/Utica production area, ranked fourth among the six leading Utica condensate producers we discussed in Part 2, with Q3 2024 production averaging a modest 10 Mb/d.
After Infinity’s IPO, Reuters reported that the Canada Pension Plan Investment Board (CPPIB), which holds a 98% ownership interest in Encino Acquisition Partners (EAP), the largest condensate producer in Ohio (Q3 2024 production of 45 Mb/d), is studying the possibility of either selling its stake or initiating an EAP IPO that would value the E&P at more than $7 billion. (CPPIB and Encino Energy, which owns the other 2% of EAP and oversees its operation, have declined comment.) Also, EOG Resources, the third-largest condensate producer in Ohio (and by far the largest Utica condensate player by market capitalization), has been talking up the potential of its Utica position, which the company has said is “almost reminiscent of what we saw nearly a decade ago happening in the (Permian’s) Delaware Basin.”
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About the song
“Hit the Lights” was written by James Hetfield and Lars Ulrich and first appeared as the 10th song on the June 1982 Metal Blade compilation release, Metal Massacre. The album was produced by Metal Blade founder and owner Brian Slagel. It also featured cuts by Los Angeles metal bands Steeler, Ratt, and Malice. Metallica‘s name was misspelled as “Mettallica” on the label. Personnel on this version were: James Hetfield (vocals, guitar), Lloyd Green (guitar), Ron McGovney (bass), and Lars Ulrich (drums).
A second version of “Hit the Lights” appears as the first song on side one of Metallica’s debut studio album, Kill ’Em All. Lead guitarist Dave Mustaine was replaced by Kirk Hammet as recording for Kill ’Em All commenced, but it is rumored he played lead guitar on this song. Credited personnel on the album were: James Hetfield (vocals, rhythm guitar), Kirk Hammett (lead guitar), Cliff Burton (bass), and Lars Ulrich (drums). Kill ’Em All was recorded in May 1983 at Music America in Rochester, NY, and produced by Paul Curcio for Megaforce Records. Originally released in July 1983, the LP was re-released in 1988, when the band had four albums under its belt and a huge following. That time, the album went to #120 on the Billboard 200 Albums chart and has been certified 3X Platinum by the Recording Industry Association of America. Two singles were released from the LP.
Metallica is an American heavy metal band formed in Los Angeles in 1981 by James Hetfield and Lars Ulrich but based in the San Francisco Bay area for most of its career. They are considered one of the pioneering groups of thrash metal along with Slayer, Anthrax, and Megadeth. They have released 11 studio albums, eight live albums, one soundtrack album, three EPs and 49 singles and have sold more than 125 million records worldwide. Metallica has won two American Music Awards, five Billboard Awards, nine Grammy Awards and two MTV Video Music Awards. They were inducted into the Rock and Roll Hall of Fame in 2009. Eight members have passed through the band since its formation. Band founders Hetfield and Ulrich, along with lead guitarist Kirk Hammett and bassist Robert Trujillo, continue to record and tour.
