Marcellus Shale

Range Resources Designates Portion Of Marcellus Shale As "Super Rich"

Range Resources (RRC) has anointed a portion of the company’s Marcellus Shale properties in southwestern Pennsylvania as “super rich” due to the high BTU content of the production stream. The company estimates that the natural gas stream of wells in this area will have a minimum 1350 Btu.

Range Resources has 570,000 net acres located in southwestern Pennsylvania and estimates that 125,000 net acres are in this “super rich” portion of the Marcellus Shale.  One recent well completed in this area had an initial 24 hour production test rate of 6.4 million cubic feet of natural gas and 1,266 barrels of liquids per day.

Range Resources has drilled and completed eight wells into this area and has released an estimated ultimate recovery (EUR) of 305,000 barrels of natural gas liquids, 95,000 barrels of condensate and 3.9 Bcf of natural gas per well.  

Range Resources estimates that once in development mode, the cost to drill and complete a “super rich” well will average $4.7 million. The typical well will have a lateral length of 3,742 feet and fourteen hydraulic fracturing stages. The well is estimated to generate an internal rate of return of 95% using the current strip and a net present value of $10.7 million per well.

Talisman Energy Announces Possible Future Reduction In Marcellus Shale Drilling in 2012

Talisman Energy (TLM) is planning further cuts in drilling in the Marcellus Shale in 2012, as low natural gas prices lead to reduced capital plans for many operators.

Talisman Energy announced its 2012 capital spending plan on January 10, 2012, and said that it would end the year with 11 rigs working in the Marcellus Shale, with a plan to average between five and seven rigs here in 2012.

Talisman Energy reported fourth quarter of 2011 and full year results on February 15, 2012, and reported that the company ended the year with ten rigs operating in the Marcellus Shale.  Talisman Energy said that the company may reduce its rig count to “as few as three rigs over the course of the year.”

Ultra Petroleum To Reduce Marcellus Shale Drilling In 2012

Ultra Petroleum (UPL) is reducing development of the Marcellus Shale in 2012, and plans to spend only $400 million on development drilling in the Marcellus Shale during the year. The company’s latest presentation indicates that in 2011, 40%, or $540 million of a $1.35 billion capital budget was dedicated to the Marcellus Shale and other properties in the Appalachian Basin.

Ultra Petroleum’s total capital budget for 2012 is $925 million, a 38% cut from the $1.5 billion spent in 2011.  The company expects to produce in a range from 250 to 260 Bcfe, representing 2% to 6% over 2011.