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Chevron (CVX) - Chevron Corporation (NYSE: CVX) Marcellus Shale Update - I'll
highlight some of our recent activities in the Marcellus Shale. In February of this year, we
closed on the acquisition of Atlas Energy and are currently working to complete the integration of these assets into our North
America business. In May, we announced the acquisition of assets from Chief Oil and Gas and Tug Hill. Through
these transactions, we added another 228,000 net acres of high-quality Marcellus Shale to our existing
footprint. Largely focused in Southwestern Pennsylvania, the acreage includes over 30,000 acres of rich gas Marcellus
in Marshall County, West Virginia. This expansion of our shale gas portfolio gives us additional high-quality resources, as
well as strong synergies with existing operations.
Talisman Energy TLM - Talisman Energy (TLM) Pennsylvania Marcellus Shale
Update - In the Marcellus, the company brought 34 net wells
onstream during the third quarter, and will continue to operate with 11 rigs for the remainder of the year. Talisman expects
Marcellus production to average approximately 400 mmcf/d in 2011, which is at the upper end of the target range set at the
beginning of the year.
Penn Virginia PVA - Penn Virginia (PVA) Marcellus Shale Update - Marcellus Shale - During the second quarter of 2011, we
drilled three (2.3 net) wells in the Marcellus Shale in Potter County, PA, including two (1.8 net) operated wells and one
(0.5 net) non-operated well. One (1.0 net) operated well was completed and two (1.3 net) wells are WOC. We have reduced our
2011 guidance for the Marcellus Shale by six (5.5 net) horizontal wells. As previously disclosed, our recently completed wells
failed to meet our expectations, but we plan to test the eastern portion of our acreage position in Potter and Tioga Counties,
initially anticipated with vertical wells, commencing in the second half of 2011
Ultra Petroleum UPL - Ultra Petroleum (UPL) is very active in the Marcellus Formation - Pennsylvania -
Operational Highlights During the first quarter, Ultra Petroleum and its partners drilled 31 gross (17 net)
horizontal wells. As of March 31, 2011, Ultra and its partners have drilled 185 gross (111 net)
horizontal wells since the program's inception in 2009. Ultra and its partners initiated production from 13 gross (8
net) new horizontal Marcellus wells during the first quarter of 2011. The average initial production rate for the wells brought
online was 6.5 MMcf per day. At the end of the quarter, there were 105 gross (67 net) horizontal wells producing since the
program's inception in 2009. In western Tioga County, Ultra drilled an extended lateral
test to 6,700 feet during the first quarter. Subsequent to quarter-end, the Pierson 810-3H
was completed with 27 frac stages and turned to sales at 10.0 MMcf per day. Similar to adjacent well estimates, preliminary
results suggest the well's estimated ultimate recovery (EUR) could exceed 8.0 Bcfe, over two times the company's 3.75 Bcfe
type curve for this area. In western Lycoming County, the company brought online a
6-well pad in the first quarter with average per well initial production rates of 7.7 MMcf per day. These wells are demonstrating
flatter declines and significantly stronger performance compared to Ultra's conservative 5.0 Bcfe type curve for this area.
At the end of the first quarter, Ultra's inventory of wells either waiting on completion or awaiting pipeline connection
was 80 gross (44 net) wells. Ninety percent of this year's expected well startups will occur in the remaining nine months
of the year with 148 gross (75 net) horizontal Marcellus wells online by the end of 2011. For the year, Ultra anticipates
its total Pennsylvania production will grow 2.5 times the company's 2010 Pennsylvania
annual volumes.
- Equitable Resources EQT - Geologists familiar with the Appalachian Basin have known for years about
the Devonian black shale called the Marcellus. The Marcellus Shale is organically rich shale that lies nearly a mile or more
beneath the surface throughout much of Ohio, West Virginia, Pennsylvania and New York. The Marcellus Shale has in recent
years emerged as a potential major contributor to the natural gas supply of the United States - large enough to be spoken
of as a "super giant" gas field. With approximately 500,000 acres, more than 3.9 Tcfe 3P reserves and 11Tcfe of
unrisked reserve potential in the Marcellus Fairway, EQT is a leading player in the Marcellus Shale.
July 2011 Update - The company drilled (spud) 61 gross horizontal wells during the second quarter 2011; 33 targeting the Huron play with an
average length of pay of 5,160 feet; and 28 targeting the Marcellus play with an average length of pay of 5,035 feet. The
company drilled 112 gross horizontal wells during the first six months of 2011; 61 targeting the Huron play and 51 targeting
the Marcellus play. More on EQT
Cabot Oil & Gas COG - Cabot Oil & Gas (COG) has land in the Marcellus Shale development field particularly
in West Virginia & Pennsylvania. Since the conference call last quarter, Cabot has achieved a new 24-hour production
record of 517 Mmcf per day in Susquehanna County from 94 horizontal wells, with cumulative production to date of approximately
175 Bcf. "Specifically we have seen one horizontal well produce 4.0 Bcf in 347 days and a different horizontal well reach
3.0 Bcf in 223 days," said Dan O. Dinges, Chairman, President and Chief Executive Officer.
"All told, we have 30 wells with cumulative production of more than 2.0 Bcf each, and of note, our two extended lateral
wells have cumulative production of more than 2.8 Bcf each in about 150 days." Cabot's position in this prolific area
of the Marcellus, resulted in Cabot recording 16 of the top 20 production wells for the first six months of 2011, as reported
by the Pennsylvania Department of Environmental Protection. In addition to productivity gains, Cabot is improving operational
efficiency. A recent horizontal well with a 3,500' lateral, reached total depth in just 12.5 days. In the third quarter, the
Company turned-in-line 17 horizontal wells, all of which are producing at curtailed rates, pending new infrastructure commissioning.
More on COG
- Hess Corp - HES - Marcellus Shale Update - If I turn to the Marcellus
again, we're continuing to build our position in the Marcellus.
We're at about 80,000 net acres now in the Marcellus,
primarily in Wayne County, Pennsylvania. About 50,000 of that is Hess operated and the balance is part of this joint venture
we have with Newfield. Our plan this year are to drill five to 10 wells during the second half of 2010 in order to evaluate
the resource potential on the acreage.
- Atlas Energy ATLS - Atlas Energy ATLS Marcellus Shale - ATLS
expects to connect 16 Marcellus horizontal wells, drilled through the partnership management business, during the first quarter
2012. Eleven of these wells were drilled in 2011, and five of these Marcellus wells have been previously drilled and completed
and are awaiting pipeline connection.
EXCO Resources XCO - Exco Resources (XCO) 2011 Update Marcellus shale - Marcellus Shale - Our current gross operated Marcellus
shale production is approximately 100 Mmcf per day, which represents an increase of more than 50% since the end of the second
quarter 2011. We have implemented a development program within our acreage in northeast Pennsylvania and an appraisal program
primarily in central Pennsylvania. We plan to drill 49 gross (16.0 net) operated wells in the Marcellus shale play in our
Appalachia region during 2011. Of the 49 wells, 42 gross (12.8 net) will be development wells and 7 gross (3.2 net) will be
appraisal wells. We are currently drilling with four operated rigs, three of which are in our northeast Pennsylvania development
area. Our net drilling dollars are reduced by the effect of the carry we receive from BG Group. Approximately $78.8 million
of the carry remains available to us from BG Group as of September 30, 2011. We expect that the remaining carry amount will
be used in the first half of 2012. We spud 12 new operated wells and drilled and completed 11 gross (4.0 net)
operated wells during the third quarter 2011 in the Marcellus shale. In northeast Pennsylvania, we turned six wells on two
pads to sales at the end of the quarter with an average IP rate of 6.4 Mmcf per day from an average lateral length of approximately
3,400 feet. In our central Pennsylvania area, we turned five wells to sales from two pads during the quarter with an average
IP rate of 5.0 Mmcf per day from an average lateral length of approximately 4,100 feet. We are also focused on building our
field infrastructure in support of our expected levels of activity. Along with efficiency gains derived from our drilling
and completion program, these infrastructure investments are expected to be the primary drivers to reduce our average development
well costs.
Carrizo Oil & Gas CRZO - Carrizo Oil & Gas, Inc. (NASDAQ: CRZO) today announced that it has agreed to
enter into a joint venture with a subsidiary of Reliance Industries Limited ("Reliance"). In connection with the
joint venture, Reliance will acquire a 20% interest in approximately 52,200 net Carrizo acres in Pennsylvania considered highly
prospective for Marcellus Shale natural gas for total consideration of $65 million. Reliance will pay $13 million in cash
to Carrizo and will pay an additional $52 million to carry Carrizo's share of future drilling, completion, and seismic costs
("development carry"), subject to customary purchase price adjustments. Closing is expected by mid-September 2010.
- Dominion Resources D - Dominion Energy also made considerable progress in its infrastructure growth program. Dominion's Natural Gas Pipeline and
Storage business has a significant list of projects intended to relieve existing congestion within its market area, as well
as facilitating the development of the Marcellus
Shale formation. For example, on May 20, Dominion Transmission signed a binding precedent agreement with CONSOL Energy to
provide 200,000 decatherms per day of firm transportation service for Marcellus Shale volumes to the market hub at Leidy, Pennsylvania. This is referred to by us as the Marcellus Northeast Project and is expected to be in service by November 2012. We
had also recently signed an agreement to provide 150,000 decatherms per day to move Marcellus Shale volumes to Craigs, New York. This project, too, is expected to be in service by November 2012.
- Continental Resources CLR - Continental Resources ( CLR ) now has exposure to the Marcellus Shale. We now own 88,000 net acres in the Lower Huron, Rhinestreet Marcellus plays and continue to build on our position. The bulk for this acreage is
located West Virginia, Ohio, and New York where the shales have at found debts of 1000 to 5400 feet. We're currently drilling
our first-four wells targeting Rhinestreet, then Lower Huron shales in Southeast, Ohio. . -
Marathon Oil MRO - Marathon Oil ( MRO ) is building a position in the Marcellus Shale ( Seeking Alpha ) - And
we’ve got four wells down in the Marcellus.
We’ll drill probably a dozen more this year. We got our first crack away. And we’re looking at well casts. And
I think you’ll see us pursue that play very similar to how we did the Bach, in terms of being measured, getting our
technical data before we get serious about it. But early indications are in terms of what we’ve seen from the
jobs, we like it. We have 70,000 acres there and I think we’ll continue to play against that. So we feel very good about
where we are.
Newfield Exploration NFX - Newfield Enters the Marcellus Shale - On October 14, 2009, Newfield announced the signing of a joint exploration
agreement with Hess Corporation in the Marcellus Shale play. The agreement covers up to 140,000 gross acres primarily in Susquehanna
and Wayne Counties, Pennsylvania. Newfield will operate the new venture with each company having a 50 percent interest. The
2009 portion of Newfield's Marcellus Shale activities will be funded within the Company's existing $1.45 billion capital budget.
Drilling operations are not expected to commence until 2010.
Consol Energy CNX - Consol Energy (CNX) Marcellus Shale Update - For drilling in the Marcellus and Utica shales, CONSOL Energy had a very successful 2011 Marcellus Shale drilling program. In 2011, in the Marcellus Shale Joint
Venture with Noble Energy, 78 gross wells were drilled, all by CONSOL. The geographic breakdown is as follows: 19 in Central Pennsylvania, 50 in Southwest Pennsylvania, and 9 in Northern West Virginia. Total daily (net) Marcellus Shale production nearly doubled from 40 MMcf
per day as of December 31, 2010 to 77.5 MMcf per day as of December 31,
2011. During 2011, 57 horizontal wells were placed online. Total well costs averaged $5.0 million
per well. The average completed lateral was 3,853 feet (or, 3,367 perf-to-perf), with twelve frac stages. Maximum 24-hour
production averaged 5.0 MMcf per well, while peak 30-day production averaged 3.5 MMcf per well per day. EURs averaged 5.2
Bcf per well. Central PA: During the fourth quarter of 2011, CONSOL Energy
continued to successfully de-risk its huge Marcellus Shale acreage position with the 10-well Hutchinson
pad in northwestern Westmoreland County. As earlier reported, the 10-well Hutchinson
pad, the company believes, is the industry's largest single pad drilled to date in the Marcellus Shale. The 10 wells were
drilled and completed for approximately $48 million, with drilled laterals cased and completed
totaling 41,200 feet (or, 3,983 feet per well, perf-to-perf). The pad had 138 continuous frac stages, which used 47 million
pounds of sand and 47 million gallons of water. This pad had 24-hour peak production of 8.3 MMcf per well, and 30-day
peak production of 4.2 MMcf per well, along with an average EUR of 4.9 Bcf per well. In Central
Pennsylvania, CONSOL Energy currently has two rigs drilling. Southwest PA: CONSOL continues
its full-scale development drilling at several Nineveh pads in Greene
County. During the fourth quarter, CONSOL brought 13 wells online at several pads with (perf-to-perf) laterals averaging
3,491 feet. These wells had 24-hour peak production of 4.6 MMcf per well, and 30-day peak production of 4.0 MMcf per well,
along with an average EUR of 6.5 Bcf per well. In Southwest Pennsylvania, CONSOL Energy
currently has two rigs drilling, and Noble Energy has one drilling in the liquids-rich area of the play. Northern
WV: In Barbour County, where the company has extensive acreage, two wells were drilled
and completed during 2011 with laterals of approximately 4,000 feet. These Phillipi-1 wells have average EURs of 5.3 Bcf per
well. Four wells were also drilled in 2011 in Upshur County, on the southern fringe on CONSOL's
holdings, with laterals averaging 3,200 feet. Three of these Alton-1 wells have average EURs
of 2.3 Bcf per well. A fourth had mechanical issues and was abandoned. CONSOL Energy currently has one rig drilling in Northern West Virginia.
- Petroleum Development Corp PETD - Petroleum Development PETD Marcellus Shale - PDC's Marcellus joint venture recently initiated its second-half 2011 drilling
program of nine horizontal Marcellus wells. Completions are expected to begin in September and will continue throughout the
remainder of 2011. Production growth in the Appalachian Basin from this nine well program is expected to be significant as
the Company moves through the third and fourth quarters of 2011. Based on results of the initial six wells in this play, the
Company anticipates reserves from its Marcellus drilling program to increase from a range of 3 to 5 Bcfe per well, to a range
of 3 to 6 Bcfe per well. Operating plans for the nine well program in the second-half of 2011 are to drill 4,000 to
6,000 foot horizontal laterals with 12 to 18 stages per well, for a total drill and complete cost of approximately $5.2 to
$6.4 million. Overall, the most recent horizontal completions contributed to a 118% improvement in Appalachian production
in the second quarter of 2011 compared to second quarter 2010. Barton R. Brookman, Senior Vice President — Exploration
and Production, commented, "We are very pleased with our operating team's execution in the development of both the horizontal
Niobrara and Marcellus Shale programs.
Noble Energy (NBL) - Noble Energy (NBL) enters the Marcellus Shale Natural Gas Field - And finally, we announced and closed in the quarter
the acquisition of a very significant position in the Marcellus
Shale to the formation of a joint venture with CONSOL Energy. As a result, we now find ourselves rapidly speeding toward a
significant inflection point in our growth profile. An inflection point that's driven by accelerating Niobrara drilling, the
new and rapidly growing Marcellus production,
as well as the pending startups of Aseng in West Africa, as well as Raton South in Galapagos in the Deepwater Gulf of Mexico.
- Trans Energy TENG - Trans Energy is very active in the Marcellus Shale and has announced in Jan 2009 a Marion County, WV well. TENG announced
that its Blackshere #101 well in Marion County, West Virginia was successfully fraced on December 29th and is currently
awaiting connection to a sales line. The Blackshere #101 is completed in the Marcellus shale, a prolific new “resource
play” in Appalachia, similar to the Barnett, Fayetteville and Haynesville shales which have grown to become a significant base of hydrocarbon reserves in the United States.
James K. Abcouwer,
President and CEO of Trans Energy, said “This fourth Marcellus well is located in Marion County which is the county
to the east of our existing Marcellus wells and is a step out of what we consider our proven area. We are delighted
with its initial indications. We are optimistic that the positive results from our three vertical wells in Wetzel
County and now with our most recent completion in Marion County can be replicated throughout our acreage position in northern
West Virginia. We’re now beginning a horizontal well program in yet another significant step forward for Trans
Energy to properly develop its acreage position. We’re pleased to have achieved this sizeable acreage position
centered on the Wetzel-Marion-Doddridge Counties area, which looks to be one of the most – if not the most
– prolific part of the Marcellus resource in Appalachia.”
Encana ECA - Encana has recently entered the Marcellus Shale
- More to come in the following months ahead.
Stone Energy SGY - Stone Energy (SGY) Appalachian Basin (Marcellus Shale Play). In West
Virginia, the third-party Caiman pipeline is projected to be tied in during the fourth quarter with volumes from 11
wells in the Mary field. The late December exit rate from Appalachia is projected to be 30-40 MMcfe per day, including liquids.
Current projections now call for 25 horizontal wells to be drilled in 2011, utilizing one horizontal rig and one top-hole
rig (up from previous guidance of 21-24 wells). Up to 16 wells are expected to be fractured during 2011. Current net production
from the Katie area in northeast Pennsylvania and Heather/Buddy area in West
Virginia is approximately 15 MMcf per day.
Pioneer Drilling PDL - During the second quarter, we established an Appalachian
drilling division to focus on operations in the Marcellus Shale. We currently have one drilling rig
operating in our Appalachian division, with a second rig expected to begin operating by late August
2009. In addition, we launched wireline operations in the Marcellus Shale play.
StatOil STO - On 26 March Statoil signed an agreement with Chesapeake which added approximately 59 thousand net acres to Statoil's current
600 thousand net acre position in the Marcellus shale gas play.
Williams Company WMB - Williams Company WMB Marcellus Shale - In the Marcellus shale, the company is currently operating four rigs and expects
to increase its level of drilling activity to eight or nine rigs by the end of 2012. In Susquehanna County, the company has
approximately 70 MMcf/d of production waiting on the expected September 2011 completion of the
Laser pipeline.
Gastar Exploration GST - Gastar Exploration (GST) Marcellus Shale - In Marshall County, West Virginia, we currently
have two drilling rigs working in our Marcellus West area. By year-end 2011, we expect to have
nine horizontal Marcellus wells on sales and 10 horizontal Marcellus wells drilled and awaiting completion. All of our Marcellus
Shale wells drilled in Marshall County are part of our joint venture with Atinum Partners
Co, Ltd. (the "Atinum Joint Venture"). After all drilling and completion costs have been incurred, our working interest
in these wells will range from 40% to 50%. In mid-August 2011, we began producing the Wengerd
1H and 7H horizontal wells at an initial combined 30-day average gross sales rate of approximately 7.1 MMcf per day of natural
gas, 176 barrels of condensate and 347 barrels of natural gas liquids (“NGLs”). On September
23, 2011, the pipeline operator shut in the pipeline due to weather-related damage to the natural gas and condensate
gathering system. While the pipeline was being repaired, we installed tubing into the two Wengerd wells that would enable
us to improve NGLs and condensate recovery and returned them to production on October 21, 2011.
Initially, production was restricted due to excessively high line pressures following the pipeline repair, but this matter
was recently resolved. The two wells’ most recent combined four day average gross sales rate is 8.1 MMcf per day of
natural gas, 200 barrels of condensate per day and 490 barrels of NGLs per day. Also in Marshall
County, we have completed fracture stimulation operations on the Corley pad (four
horizontal wells), with first sales anticipated in mid-November 2011. Currently, we are commencing
fracture stimulation operations on the three-well Simms pad with first production anticipated
mid-December 2011. As of September 30, 2011, drilling operations
have been completed on the Hendrickson 1H, 2H and 4H wells, and we completed drilling operations on the Hendrickson 3H and
5H wells in late October 2011. Fracture stimulation operations on all five Hendrickson wells
are anticipated to commence in March 2012, and first sales are anticipated in the second quarter
of 2012. Currently, we have commenced drilling operations from the Hall pad (three wells) and the Burch Ridge pad (five wells),
and we expect to commence drilling operations on the Accettolo pad (three wells) prior to year end. On our Marcellus
East position in Preston County, West Virginia, we have drilled one horizontal well to test
this acreage, which is 100% owned by Gastar. In August 2011, we completed the Hickory Ridge
2H horizontal Marcellus well, a 2,500-foot lateral completed with a 10-stage fracture stimulation, and we are currently flowing
back completion fluids. First sales from the Hickory Ridge 2H are anticipated by year end. Our focus for the remainder of
2011 and through 2012 in the Marcellus East acquisition area is to perform a 3-D seismic survey over a portion of the acreage,
with no additional wells currently planned during that time frame. In Butler County, Pennsylvania,
Gastar and Atinum have been participating in seven wells with Rex Energy as operator. Three wells are expected to be on sales
by year-end, with the remaining four wells expected to go online in early 2012.
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