Expect a sharp increase in Michigan Basin drilling in the months to come, courtesy of a promising new shale play dubbed the Collingwood. Adding to the allure is a liquids component—all the rage in unconventional plays these days. Given the lack of big rigs in Michigan, opportunities abound for 1,000 hp and larger rigs suited for drilling long laterals.
EnCana subsidiary Petoskey Exploration opened the new shale play in Michigan with the testing of the State Pioneer 1-3 well in Missaukee County. In the process, it spawned a record lease sale as operators from outside Michigan scrambled to snatch up acreage in the newest example of the ever-proliferating unconventional resource boom that is redefining U.S. drilling.
The sale drew $178.3 million in bids, or just over $1,500/acre, vs. the $26/acre earned at earlier auctions. Most of the money came from outside Michigan. Chesapeake took most of the sale’s leases. EnCana had already built a substantial lease position with >250,000 acres. Lease sale results are being finalized and will be made public in early June.