Marcellus Shale

Anadarko Petroleum - Q4 2010 Conference Call - Marcellus Shale Commentary

Anadarko Petroleum (APC) reported earnings for the fourth quarter of 2010 and held a conference call on February 1, 2011, with investors and analysts to discuss the results.  The company disclosed additional data on its operations in the Marcellus Shale. 

“The Marcellus Shale continues to be the only major area where we are drilling for dry natural gas due to the proximity to premium gas markets, which further enhance the already robust economics of the play. We exited the year with approximate gross sales volumes in the Marcellus Shale of 330 million cubic feet per day from about 70 wells…The decline rates are in line with our expectations on our tight curves that we've provided in the past.”

“Growing inventory of wells that are not flowing the line -- if we look across our portfolio and I'll focus on the Marcellus because it's probably the example with the largest non-producing inventory. It's now approaching 200 wells.”

“50 wells that are now under some stage of completion. And that is just associated with the complexity of the process of completing a horizontal well… 75 wells that are waiting on the completions, waiting for them to get in line on the completions. And finally, though we have several wells in the order of 70 wells that have actually been completed that are waiting on the pipeline connections.”

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EQT Corporation - Fourth Quarter Of 2010 Conference Call - Marcellus Shale Commentary

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.”

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Ultra Petroleum Discusses Marcellus Shale - Third Quarter Of 2010

Ultra Petroleum (UPL)  held a conference call on November 2, 2010, to discuss earnings for the third quarter of 2010, and discussed the company’s activities in the Marcellus Shale.

“We're very pleased with the early results in the Marcellus program, but we remain focused on learning quickly about the resource potential of our acreage position. During the first three quarters of 2010, Ultra has been very active in this horizontal program in the Marcellus Shale.”

“As of September 30, Ultra had a total of seven horizontal rigs drilling in the Marcellus. The third quarter, we participated in the drilling of 20 new horizontal wells, which brings our year-to-date total of horizontal Marcellus wells drilling case to 79 gross, 48 net wells. For calendar 2010, we expect to drill and case approximately 115 gross, 17 net wells. Also in the third quarter, 23 horizontal wells were brought online. This was the most active quarter to date for getting wells completed and online, nearly doubling the number of wells producing as compared to the end of the last quarter.”

 “Activities in our joint venture with Anadarko continue to ramp up. In the third quarter, 11 wells were drilled and five wells were brought online. Increases in development activities that we have projected for the last part of the year are well underway. Gathering system with a capacity of 200 million cubic feet per day officially commissioned in Southwest Lycoming County. We are excited about this area. In fact a significant amount of drilling activity to be focused here in the near term.”

“We've also dedicated considerable efforts to understanding the geographic variability of the Marcellus, possible impact to geologic features might have on well performance. Specifically, we've been studying such things as lateral placement, structural positioning of wells, well proximity and bed curvature. Results are directly contributing to both better drilling efficiency as discussed above and a better understanding of acreage prospectivity across our 470,000-acre position.”

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