Marcellus Shale

Ultra Petroleum - Q2 2011 Marcellus Shale Summary

Ultra Petroleum (UPL) made rapid progress on the development of the Marcellus Shale during the second quarter of 2011.  Here are some highlights from the quarter:

• Participated in 50 gross or 23 net horizontal wells.
• Operating ten rigs in the Marcellus Shale.
• Six month Marcellus Shale total is now 81 gross or 39 net wells, and cumulative total since entering play in 2009 is 235 gross or 133 net wells.
• Net production averaged 106 million cubic feet of natural gas equivalents per day – 16% sequential and a 320% year over year increase.
• During July 2011, net production hit 131 million cubic feet of natural gas equivalents per day.
• Total inventory of 110 gross or 53 net wells either waiting on completion or awaiting pipeline connection in the Marcellus Shale.
• Total production in 2011 from the Marcellus Shale is estimated at 40 Bcf.
• Lycoming County EUR’s increased from 5.0 Bcfe to 6.3 Bcfe.
• Tioga County EUR’s increased from 3.75 Bcfe to 4.25 Bcfe.

Range Resources Increases EUR's For Marcellus Shale Wells

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.

Anadarko Petroleum Updates 2011 Marcellus Shale Activity

Anadarko Petroleum (APC) updated the investment community on its operations and 2011 planned activity in the Marcellus Shale.  

Anadarko Petroleum expects that the average estimated ultimate recovery (EUR) on Marcellus Shale wells will be at the high end of the 4 billion to 6 billion cubic foot range given earlier by the company.

Anadarko Petroleum plans to operate 10 rigs in the Marcellus Shale in 2011, and participate in 250 wells during the year.