Building a Solid Foundation for Growth

Stratas Advisors

Gravel

The Utica Shale has been a hot spot for unconventional oil & gas development in recent years, and a nearby aggregate and mineral supplier saw big opportunities there. Namely, Utica operators needed well pads for drilling, and those well pads required aggregate for construction. But although the supplier had a long, successful track record with other industries, it hadn’t provided services for oil & gas operations before. To effectively position its resources and begin expanding its client base, the company needed to know how many pads would be built in the Utica’s core Ohio areas and who would be drilling.

The aggregate supplier reached out to us on the recommendation of an oil industry executive who was familiar with our expertise. Stratas Advisors maintains extensive, frequently updated records on the Utica Shale as part of our North American Shale service, which tracks drilling activity, production results, well economics, acreage transactions and midstream infrastructure in 18 key regions in the U.S. and Canada. Drawing from this data and factoring in elements such as well-pad spacing and which areas of the Utica are the highest-valued, we calculated future Utica well-pad construction. We then gave provided a detailed forecast with listings by Ohio county and operator so the aggregate supplier could pinpoint where to focus its efforts.

After seeing our projections, the company opened new Utica-area rail yards to house aggregate for delivery to well locations, and it bought an asphalt company to support road construction between well pads and main roads. The financial benefits from the expanded operations not only positioned the company as a key player in the Utica, but also allowed it to create more jobs for the region and reward stakeholders with large returns. The company also has its eye on additional expansions to serve Marcellus Shale operators in neighboring West Virginia and Pennsylvania.
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