Marcellus Shale

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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Magnum Hunter Resources Reports Marcellus Shale Completion

Magnum Hunter Resources Corporation (MHR) issued an operational update on its oil and gas activities.  The company has 50,000 net acres in West Virginia and Ohio that are prospective for the Marcellus Shale. 

Magnum Hunter Resources reported that the Weese Hunter #1001 well located in Tyler County, West Virginia had an initial production rate of seven million cubic feet equivalent per day from the Marcellus Shale.

The Weese Hunter #1001 well was drilled with a 4,028 foot horizontal lateral and completed with a twelve stage hydraulic fracturing job.

EQT Corporation - Marcellus Shale Q3 2010 Conference Call Comments

EQT Corporation (EQT) held a conference call in late October 2010 to discuss the company’s financial results for the third quarter of 2010.  The company made comments on its acreage that is prospective for the Marcellus Shale. 

The Marcellus Shale is becoming a major area of operations for the company and over the last year production from the Marcellus Shale has reached 20% of the company’s production.

“Contribution from the Marcellus shale play alone is growing rapidly and represented nearly 20% of our volumes in this quarter, up from only 2% in the third quarter of 2009.”

“EQT has spud a total of 132 horizontal wells in the Marcellus play of which 53 are currently online. Of the 79 wells not yet online, 18 are either currently drilling or have been pop-holed, 42 are drilled and awaiting a frac job and 19 have been fraced and are awaiting pipeline hookups.”

“Another way we look at our progress internally is by frac stages online or in the system for our Marcellus wells. As of the end of the quarter 595 frac stages are online 246 are completed, but not yet online. And 789 are planned for well spud, but the not yet fraced.”

“After having accounted for only 2% of our sales from our third quarter of 2009 and the Marcellus accounted for nearly 20% of our sales of produced natural from third quarter of 2010 and we expect Marcellus to account for about 30% of fourth quarter sales.”

“A well in Greene County well which had a 30 day production rate of 22 million cubic feet per day is currently constrained to allow for the fracing of 7 wells on the same pad. On the last full day of production October 12, the 37th day, this well had a 24 hour rate of 20.2 million cubic feet equivalent per day.”

“The Armstrong County well, which had a 24 hour production rate of 15 million cubic feet per day is also turned in line. Due to capacity constraints in that area, this well is producing under 2 million cubic feet per day right now, which happens to be the total takeaway capacity in that area. Given the takeaway constraints, we will not have meaningful initial 30 day production data from this well.”

“Approximately 40% of our 500,000 Marcellus acres contain wet gas. Structurally one positive for EQT is that it appears unnecessary to invest our own capital even as part of a joint venture to process fractionate and transport our wet gas and liquids in the Marcellus.”

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