Chattanooga Shale

CNX Gas - Chattanooga Shale Update

CNX Gas (CXG) reported on its recent activities in the Chattanooga Shale for the first quarter of 2010. The company drilled 13 horizontal wells in the Chattanooga Shale, and expects to drill a total of 25 wells during 2010. The total cost to drill these wells will be $28 million, or $1.12 million per well.

CNX Gas is no longer an independent company and was purchased by CONSOL Energy (CNX) in early 2010.

CNX Gas Reports On Chattanooga Shale

CNX Gas (CXG) is one of the few publicly traded companies that are developing the Chattanooga Shale. The company made the following comments in its third quarter earnings press release.

“CNX Gas continues to be encouraged by its early Chattanooga Shale results. The company has been pursuing a delineation program across its position, which now stands at 268,000 mostly contiguous acres. One well, which came online on October 21, 2008, has produced over 140 MMcf, and is now producing at a daily rate of 861 Mcf, plus a few barrels of oil. A four-stage nitrogen foam frac was employed on this well. CNX Gas continues to acquire acreage in the Chattanooga Shale.”

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The Chattanooga Shale - CNX Gas

CNX Gas is drilling a test well in the Chattanooga Shale on its acreage utilizing a nine stage hydraulic fracturing in a single lateral of 2500-3000 feet. The original drilling program used a four stage hydraulic fracturing.

CNX Gas is currently operating two rigs in the Chattanooga Shale in 2009. If this new hydraulic fracturing program increases productivity, CNX Gas projects that it will have 2700 possible drilling locations assuming 80 acre spacing.

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The Chattanooga Shale - CNX Gas

CNX Gas (CXG) is an exploration and production company with nearly one million acres under net lease in various shale plays in North America. CNX Gas has 244,000 net acres under lease in the Chattanooga Shale, and the company estimates that its net unrisked resource in its Chattanooga Shale acreage to be in a range of 1.1-2.5 Tcf. Its proved reserves are currently 11 Bcf.

CNX Gas is currently developing its acreage in the Chattanooga Shale in Tennessee. The company’s first horizontal well in the Chattanooga Shale had an initial production (IP) rate of 3.9 Mmcf per day. CNX gas has drilled a total of 20 horizontal wells in the Chattanooga Shale through June 2009.

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The Chattanooga Shale - Description

The Chattanooga Shale is an Upper Devonian shale formation that runs through Tennessee, Alabama and Kentucky. It runs concurrently and is located below the Floyd Shale, which is an Upper Mississippian Shale formation.

The Chattanooga Shale is not a major focus of the oil and gas industry since other shale plays are more attractive and delineated at this time. Companies that are currently developing its acreage include Geomet (GMET) and CNX Gas (CXG).