Range Resources (RRC) disclosed additional information on the company’s wells drilled into the Marcellus Shale, including updated data on the estimated ultimate recovery (EUR) of wells on its leasehold in the Southwest area of Pennsylvania.
Range Resources said that the average EUR of the 103 horizontal wells put onto production in 2009 and 2010 averaged 5.7 Bcfe per well. The EUR is composed of 4 billion cubic feet of natural gas and 281,000 barrels of liquid hydrocarbons. The company also indicated that the average lateral length of the 2009 and 2010 wells was 2,802 feet with nine fracturing stages.
Range Resources disclosed that the average Marcellus Shale well cost $4 million to drill and complete and yielded a drill bit finding and development cost of $0.82 per mcfe. The returns are now at 79% using prices of $4.00 for natural gas price and $85.00 for crude oil and using the assumption that 40% of the EUR is produced in the first five years.
Range Resources also reported that the company has 73 wells in southwest Pennsylvania that are either waiting on completion or pipeline. Another sixteen wells are in a similar status in the northeast portion of the play (nine wells waiting on pipeline, seven waiting on completion.)
Range Resources estimates that production from the Marcellus Shale will be 400 million cubic feet of natural gas equivalents per day at the end of 2011, and 600 million cubic feet of natural gas equivalents per day by the end of 2012.