EQT Corporation (EQT) reported fourth quarter of 2010 and full year results and held a conference call on January 27, 2011, to explain the results to investors. The company used the call to discuss its activities in the Marcellus Shale, where it has 500,000 net acres under lease in Pennsylvania and West Virginia.
“Contribution from the Marcellus Shale alone is growing rapidly and represented nearly 19% of our volume this year, up from just 3% in 2009.”
“EQT has spud a total of 143 horizontal wells in the Marcellus Shale to date, of which 67 are currently online. Of the 76 wells not yet online, 8 are either currently drilling or have been top holed. 48 are drilled and awaiting a frac job, and 20 have been fracked and are awaiting pipeline hook-ups. “
“As of the end of the year, 788 frac stages are online, 276 more are completed, but not yet online, 654 are planned for wells that have been drilled to total depth, but not yet fracked, and 108 are planned for wells that have been spud, but not yet drilled the total depth or fracked.”
“Marcellus production accounted for 27% of our sales of produced natural gas in the fourth quarter. Our success in the Marcellus in 2010 also drove the 28% increase improved reserves and a 70% increase in improved probable and possible, that is 3P reserves. Marcellus proved reserves increased 270% to nearly 2.9 Tcfe.”
“So in Pennsylvania, it assumes 265 wells, averaging 6.3 Bcf with an average length of 4067 feet. In West Virginia, 201 wells, averaging 4.7 Bcf with an average length of 3700 feet.”
“In general, the economics of our West Virginia Marcellus wells are expected as a result to be similar to the economics of the average Pennsylvania Marcellus well.”
“In 2011, Midstream plans to add 130 million cubic feet per day of gathering capacity in Pennsylvania to productions Marcellus drilling. To ensure that the Marcellus gas gets the market, Equitrans will be expanded over the next two years to add 550 million cubic feet per day, including a pipeline expansion from the discharge of MarkWest's processing plant.”