Marcellus Shale

Ultra Petroleum May Increase EUR's For Marcellus Shale Wells

Ultra Petroleum (UPL) discussed the Marcellus Shale during its quarterly earnings conference call held on July 30, 2010. The company is accelerating development in the Marcellus Shale and has seen excellent results to date on its acreage.

Ultra Petroleum hinted during the call that based on recent results of developed wells, the company may raise the estimated ultimate recovery (EUR) for wells on its Marcellus Shale properties.

“Well declines have been flatter than we originally projected in our 3.75 Bcf EUR-type curve… If the trend continues, we will likely push our EUR estimates upward.”

“The producing rate for our wells on their 60th-producing day is currently averaging 3 million cubic feet per day. This is a factor that speaks to the flatter decline rates.”

“Our results in the newly acquired acreage in Clinton and Centre counties where we're partnering with Anadarko are confirming our view that the resource will be more prolific in this area. We have previously stated that we expect EURs in this area to average about 5 Bcfe per well. So far, we have initial flow test on four wells averaging in excess of 7 million cubic feet per day.”

Source

Rex Energy - Marcellus Shale Reserves

Rex Energy Corporation (REXX) reported earnings for the fourth quarter of 2009, and held a conference call to discuss its operations in the Marcellus Shale in Pennsylvania. The company provided details on its reserves in the Marcellus Shale and the future potential of its acreage.

Marcellus Shale Reserves

“To try and illustrate the future reserve potential from our current 68,700 Marcellus Shale acres. To start we have assumed that only 75% of our net acreage will be drilled on 80-acre well spacing, which is the spacing we are currently using. This gives us 644 potential net risk well locations. Next, we use a range of estimate for the ultimate recovery per well to get a low, mid and high case.”

“Our EURs are currently averaging slightly higher than the mid case. After deducting an average 15% royalty and the 54 Bcfe we already booked as proved reserves attributable to the Marcellus shale we calculate a reserve base of between 1.3 and 1.9 Bcfe. Therefore, we have the potential through the development of our Marcellus acreage to increase our reserves in the coming years by 11 to 15 times our current proven reserves dives of 125.2 Bcfe.”

Marcellus Shale Decline Curve

“The decline curve that we are using right now assumes about a 70% to 75% decline in year one and then goes from there down to about a 6% terminal decline. I don’t think that the wells that we have to date are declining quite there rapidly but it’s too soon for us to change our assumed decline rate.”

Source: Seeking Alpha