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Ohio’s Utica Shale Play: Making the most of ‘the real deal’

The Ohio Department of Natural Resources (ODNR) declared this week that oil and gas production from the Utica shale play in Ohio is “the real deal.” ODNR Director James Zehringer reported the beginning of “unprecedented growth in oil and gas production.”

Effective communication will be an important factor for companies hoping to take advantage of the opportunity.

According to ODNR’s long-anticipated annual analysis of shale well production numbers, Ohio hosted 87 oil- and gas-producing horizontal wells at the end of 2012, with nearly half of them in Carroll County, roughly between Canton and Youngstown. Perhaps most telling, ODNR expects the number of horizontal drilling permits to grow from 86 in 2011 and 376 in 2012 to 526 this year, 750 in 2014 and 1,000 in 2015. ODNR projects that 1,000 total wells will be in production by 2015, compared with the 87 officially reporting production in 2012. The ODNR results are posted here.

Some media and analysts say the results are less than expected. In reality, energy costs, raw materials supply, job market and property values, particularly in Northeast Ohio, will likely be significant and long term.  Several large oil and gas development companies, including Anadarko, Chesapeake, BP and others, are drilling aggressively. Midstream companies that build pipelines and infrastructure are investing billions and moving as quickly as possible to connect to the growing number of producing wells.

The communications implications are widespread:

  •  Media relations I: Journalists at all levels of media, from national and international to trade, broadcast and digital outlets, have a nearly limitless appetite for this story. And they’re coming at it from all angles – energy, economic impact, business, financial, environmental, regulatory, human resources, land use, urban and rural planning, to name a few. If you’re in the industry, serve the industry or want to be a player, you have a chance to be part of the story. But plan ahead. It does little good to be surprised by a reporter asking you to share specifics.
  • Media relations II: When working with the media, look for ways to “hook” your story or company to a major trend. The media have a built-in interest in anything related to the shale play. Creativity, relationship-building with media, thinking strategically about timing and managing expectations become critically important under such conditions.
  • Crisis communications: The opposite is also true: media may become more interested in your company than you are in working with them – in a crisis situation or for competitive reasons, for example. Be prepared to handle increased scrutiny. A crisis communication plan, crisis communications training, preparedness drills, and monitoring of news media and social media are excellent starting points. Take note, for example, that ODNR wants the industry to be “prosperous but not at the expense of the environment” and is committed to developing and strictly enforcing “proactive, not reactive, laws.” It is also moving toward quarterly reporting by the industry and the agency.
  • Internal communications: The competition for highly skilled, motivated manufacturing, maintenance, transportation and field service workers could be fierce by 2015. Already, some companies are reporting that they have lost some valued employees to oil and gas employers.  This suggests a need for impactful internal communications (perhaps along with additional job training and enhanced career advancement opportunities) to help retain talent. 
  • Marketing communications: For companies eager to enter Ohio’s oil and gas sector, you must move quickly and smartly. Web content and marketing materials that address the unique needs of the industry, and a sales force that understands the market and the customers and speaks the language are essential. Demonstrate thought leadership and previous experience in your business development marketing and communications. The Utica play in Ohio may well be on the verge of a boom. Few Ohio organizations will be unaffected. Communications can play a significant role in maximizing the benefits and minimizing the risks.
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