Marcellus Shale Field - Natural Gas Formation Location Marcellus Shale Formation States: New York, Pennsylvania, Ohio, West Virginia
Marcellus Shale Play is located in the following counties: PA: Erie,
Warren, McKean, Crawford, Mercer, Vanango, Lawrence, Forest, Clarion, Butler, Beaver, Armstrong, Elk, Clearfield, Indiana,
Cambria, Somerset, Westmoreland, Fayette, Allegheny, Washington, Greene, Bedford, Potter, Tioga, Bradford, Susquehanna, Wayne,
Pike, Lycoming, Sullivan, Wyoming View Map. Looking for a Job in the Marcellus Shale? View Here
History and Facts: The Marcellus Shale Natural Gas Field Formation,
which extends through Pennsylvania, New York, Ohio, and West Virginia, is a part of the Devonian Black Shale Field. The Marcellus Shale play is hinted to hold a huge amount of
natural gas, causing companies to go on a gigantic mineral rights land grab! This shale rock formation was named after the town of Marcellus, New York due to the outcrop formation
in the shale. The Marcellus shale extends over 575 miles and has a thickness of up to 900 feet. Also known
as the Pennsylvania Shale ( or New York Shale, West Virginia Shale, Ohio Shale ) this geologic natural gas shale
was reported to hold more then 1.9 trillion cubic feet back in 2002. This did not cause much excitement because the
amount that could actually be extracted was low. Combined with the fact that natural gas prices were very low, drilling in
the Marcellus Shale was not economical. One company, Range Resources, showed up to Marcellus Shale
back in 2003 in hopes to extract natural gas. Range drilled a well in Washington County, PA and found that this natural
gas well was very promising. Like many companies now a days, Range Resources used techniques and experience from
the Barnett Shale in Texas for the Marcellus Shale natural gas field. The first well that produced gas in Marcellus Shale
for Range was hit in 2005. Range Resources ( RRC ) now has drilled over 100 natural gas wells on their 900,000 acres in
the Marcellus Shale play. See more about companies drilling at Marcellus Shale below.
A new survey issued
by Terry Englander, a geoscience professor at Pennsylvania State University, and Gary Lash, a geology professor at the State
University of New York at Fredonia, surprised everyone as these men think the Marcellus Natural Gas Shale Field could
hold up to 500 trillion cubic feet of Natural Gas. 50 TFC would be a realistic amount that could be recovered.
All of this is made possible by more advanced technology which includes fracturing & drilling techniques
involved with horizontal drilling, thus making the Marcellus Shale Natural Gas Field very valuable! The price
of Natural Gas has risen sharply over the years and these new techniques allow companies to drill better and faster.
A horizontal well in the Pennsylvania, New York, Ohio, and West Virginian Shales back in 1970 might have taken up to
3 months to drill. Now a rough estimate is 30-45 days.
The United States produces roughly 30 trillion
cubic feet ( 30 TFC ) of natural gas every year. If research reports are correct and the Marcellus Shale holds
50 TFC's of recoverable natural gas, this would put the Appalachian Basin Natural Gas Shale into a different league.
The Marcellus Shale Deposit would be dubbed a natural gas super giant and would be one of the biggest natural gas fields
in the United States. The Haynesville Shale is a similar Natural Gas Shale.
How is Natural Gas extracted from Marcellus Shale? Energy
companies use a new drilling technique called horizontal drilling. First the drilling company drills vertical, and
then drills horizontally. The problem with Horizontal Drilling is the cost. A vertical drilled well in the
Marcellus Shale Zone costs around $810,000 while a horizontal drilled well at Marcellus will cost you roughly 3-5 Million
Dollars. In the Marcellus Shale, a horizontal well is drilled using multi stage fracturing techniques ( frac jobs ).
Large amounts of water are combined with sand which are blasted at the shale in order to get a fracture. This
contaminated water is then pumped back out and stored. There have been some environmental issues with regard to the
Marcellus Shale.(See Below).
Marcellus
Shale in 2010: During 2009, the Marcellus Shale fell victim to low natural gas prices due to the economic
recession. The drilling companies below really cut back on the number of active drilling rigs but we saw a noticeable
tick-up in December 2009. We also saw a major aquisition in the Oil & Gas sector with Exxon Mobil ( XOM
) buying XTO Energy ( XTO ). Cold weather and snow has been gripping the northeast which caused Natural Gas prices to hit $6.
I am expecting the Marcellus Shale to really come alive again during 2010. Natural Gas prices
have the opportunity to hit $8-9 toward the end of 2010 as the demand quickly comes back. This will spark even
more activity as far as land leases and drilling go. If you are investing in the stock market, I really like Chesapeake
Energy ( CHK ) below $30 in 2010.
The recent rise
in the price of natural gas has caused a spike in the amount of drilling in the Marcellus Shale and the other
shale formations below. Production remains steady as we head into 2010. When you see natural gas prices
move above $7 again, the drilling in the Marcellus Shale formation will really come alive! Don't
forget to check out these other shale plays just as hot as Marcellus. Haynesville Shale -Horn River Shale - Bakken Oil Shale - Fayetteville Shale - Brazil Oil Field - Woodford Shale - Barnett Shale - Chattanooga Shale - Utica Shale
Pennsylvania Warns Gas Companies to respect Natural Treasures at Marcellus
Shale:
Pennsylvania has an estimated 2.8 trillion cubic feet of proved natural gas reserves in
the ground awaiting development, according to the Pennsylvania Oil and Gas Association. Developing the Marcellus Shale
formation requires large amounts of fresh water to fracture the shale in order to extract the natural gas. Recent inspections
by DEP and its partners have uncovered violations that threaten the state's water resources and its environment. Department
of Environmental Protection Secretary Kathleen McGinty had this to say:
"Over the past few weeks, DEP
inspectors have observed a number of violations at drilling sites operated by companies that were new to Pennsylvania,"
said McGinty. "In light of those discoveries, we acted quickly to stop this harmful activity and felt it was necessary
to bring all current and potential operators together to meet directly with the agencies responsible for protecting our water
and other natural resources." Full Article Here
Companies Involved in the Marcellus Shale - Marcellus
Shale Stocks
- Chesapeake Energy CHK - Marcellus Shale (West Virginia, Pennsylvania and New York):With approximately 1.5 million
net acres, Chesapeake is the largest leasehold owner in the Marcellus Shale play that spans from northern West Virginia across
much of Pennsylvania into southern New York. The company’s joint venture partner, StatoilHydro (NYSE:STO, OSE:STL),
owns approximately 570,000 additional net acres of Marcellus leasehold. Chesapeake remains the most active driller and expects
to become the largest gross producer of natural gas from the play by year-end 2009. During the 2009 third quarter, Chesapeake’s
average daily net production of 35 mmcfe in the Marcellus increased approximately 21% over the 2009 second quarter and approximately
338% over the 2008 third quarter. Chesapeake is currently producing a company record monthly average of approximately 50 mmcfe
net per day (100 mmcfe gross operated) from the Marcellus and anticipates reaching approximately 90 mmcfe net per day (180
mmcfe gross operated) by year-end 2009, approximately 220 mmcfe net per day (440 mmcfe gross operated) by year-end 2010 and
approximately 390 mmcfe net per day (780 mmcfe gross operated) by year-end 2011. To further develop its 1.5 million net acres
of Marcellus leasehold, Chesapeake is currently drilling with 20 operated rigs and anticipates operating an average of approximately
28 rigs in 2010 to drill approximately 170 net wells. During the first three quarters of 2009, approximately $85 million of
Chesapeake’s drilling costs in the Marcellus were paid for by STO. During the 2009 fourth quarter through 2012, 75%
of Chesapeake’s drilling costs in the Marcellus will be paid for by STO, or approximately $2.0 billion over the next
three years.
If you have a lot of land in the Marcellus Shale fairway and want
to sell your mineral rights, give Chesapeake a call. More on CHK
.
- XTO Energy XTO XTO Energy buys Marcellus Shale stake from Linn Energy LINE - CEO in last earnings call --If you look at kind of how we looked at Linn it was 145 Bs of reserves that we
quoted. Linn had about 200 Bs on their own reserve report. And if you just look at that, that means in general, if you believed
Linn then we paid $3 in them with almost nothing for the Marcellus,
and if you look at what we did, it's something like a thousand or so dollars an acre for the Marcellus. All of those were very low cost for entry points into one of these kind
of plays. I mean so we don't need the Marcellus
to pan out to be a fantastic thing, we think it probably will and that's why we are in this early. XTO has acreage in southwest Pennsylvania and north West
Virginia which there is alot of good well data coming out. XTO Energy now has 280,000 Marcellus Shale Acres. XTO May 2009
Update: Last but not least, Marcellus Shale.
We are running one rig. We are currently completing our first horizontal and drilling our second, we’ve almost tidied
our second and they look good, shows look very good, we are excited about them. And so, we think we’ll get our 10 to
15 horizontals drilled and if we can, we will bring a second rig into the Marcellus in the back half of the year and take it up to Northeast Pennsylvania. We are excited about
what we are seeing in the Marcellus well. No
well data at this point, but you should see something in the next quarter. More on XTO
- EOG Resources EOG - Regarding the Pennsylvania Marcellus Shale Play, in total, we have 220,000 net acres. On our previous quarterly
call we indicated we proven up about 40,000 acres in Bradford County by drilling two wells with two net Bcf of reserves each.
Additionally, we recently proved up additional acreage, we own via an NFG farmout by successfully testing the COP 409 #3H
well in Elk County which we believe is a 1.6 Bcf net well. We plan to operate one rig in Pennsylvania this year.
More on EOG
- Penn Virginia PVA Production in the second quarter averaged 32.2 MMcfe per day, one percent higher than the
31.9 MMcfe per day produced in the second quarter of 2008 and flat as compared to the 32.2 MMcfe per day produced in the first
quarter of 2009. We plan to commence testing of our Marcellus Shale acreage in Pennsylvania as early as the fourth quarter
of 2009, with additional exploratory drilling planned for 2010.
- Rex Energy REXX - The company currently holds approximately 81,000 gross (70,000
net) acres in the Marcellus Shale fairway. In the event that Williams, Rex Energy's joint venture partner in two of its project
areas, fulfills their drilling carry commitment under the terms of the exploration agreement, Rex Energy's net acreage will
be reduced to approximately 48,000 net acres. The company is continuing to lease additional acreage in each of its operating
areas. In a final comment, Mr. Hulburt stated, "We have now completed two horizontal Marcellus Shale wells -- the first
in Butler County and the second in Westmoreland County. The Butler County horizontal well was drilled to a depth of approximately
5,500 feet with a lateral extension of 1,800 feet. The well was put into production during June 2009 and has produced at an
average rate of approximately 2.4 Mmcfe per day over the last thirty days, with no detectable decline in production since
being put into line. We are continuing to monitor the well's performance, but to date are encouraged by what appears to be
a shallower decline than we initially anticipated. In Westmoreland County, the well was drilled to a depth of approximately
8,200 feet with a lateral extension of 2,000 feet. The well was fracture stimulated on July 20, 2009 and is currently undergoing
flow testing. The company has commenced drilling its third horizontal well, also in Westmoreland County, and plans to continue
drilling an additional 3 horizontal wells in that county before moving the rig to central Pennsylvania in the fourth quarter."
- Southwest Energy SWN - In the first quarter of 2009, the company purchased approximately 21,715 net acres in Lycoming County,
Pennsylvania, for approximately $8.2 million. As a result, Southwestern currently has approximately 138,600 net undeveloped
acres in Pennsylvania under which it believes the Marcellus Shale is prospective. During 2008, the company drilled its first
four wells (three vertical and one horizontal) on its acreage in Bradford and Susquehanna Counties, three of which have been
production tested. In 2009: Southwestern plans to invest approximately $80 million in various unconventional,
exploration and New Ventures projects, including the Marcellus Shale play in Pennsylvania.
- Unit Corp UNT- In the Marcellus
Shale, we have now participated in two vertical wells located in Somerset County, Pennsylvania. The Shale (inaudible) segments
in these wells came in as expected and completion work on these two wells should begin mid to late May. In addition, we'll
participate in one more vertical well and two horizontal wells during the remainder of 2009 at approximate net cost of about
$8 million. Anticipated first gas wells from these wells should occur later this year.
In
this Somerset area we own approximately 180,000 gross and 55,000 net acres.
Marcellus Shale Map - Marcellus Shale Fairway
Marcellus Shale
Marcellus Shale Jobs
- Anadarko Petroleum APC - - During the 4th quarter, Anadarko spud seven operated horizontal wells in the Marcellus Shale and completed
four operated horizontal wells. The company's two most recent flow tests each exhibited sustained test rates in excess
of 7 MMcf/d with 3,000 psi flowing tubing pressure. Anadarko is currently operating three rigs in the area, while participating
in an additional 11 non-operated rigs. The company expects to increase the number of operated and non-operated rigs throughout
2010. During the 4th
quarter, Anadarko increased its position in the Marcellus Shale play from approximately
630,000 to 715,000 gross acres and operates about half of the acreage position with an average working interest of 50%. More on APC
- Range Resources RRC - The Marcellus Division is continuing to delineate and de-risk its large land
position. We now have a rig in northeast Pennsylvania in Lycoming County drilling the first of two horizontal wells, which
offset our high-rate vertical wells. We expect initial results from these two wells by early next year.
Marcellus
Shale production is well on plan and now exceeds 80 Mmcfe per day net and is expected to approach the higher end of the previously
revised target of 90 - 100 Mmcfe per day net by year-end 2009. From inception, Range has drilled 77 horizontal Marcellus
Shale wells, of which 60 have been completed and 54 are on production. The Company expects to drill and case approximately
20 additional horizontal wells in the Marcellus Shale play during the fourth quarter 2009 and carryover approximately 20 of
these for completion in 2010. The Marcellus division is currently running a total of four horizontal rigs. We anticipate
entering 2010 with six custom-built horizontal rigs.
The build out of the Marcellus
midstream infrastructure in southwest Pennsylvania is progressing as scheduled. By December 2009 or January 2010, gross
cryogenic processing capacity is expected to increase to 155 Mmcf per day. An additional 30 Mmcf per day of processing
capacity is expected to be added in mid-2010 and another 150 Mmcf per day has been ordered for start-up in mid-2011, increasing
gross cryogenic processing capacity to more than 300 Mmcf per day. The current 65 Mmcf per day refrigeration processing
is expected to be suspended during 2010 as the new cryogenic processing is brought on. More on RRC
St Mary Land and Exploration SM - St. Mary has drilled and completed its first two horizontal wells in
this program. The wells are the Potato Creek 1H and the Potato Creek 3H (both SM 70% WI). These wells are located in McKean
County, Pennsylvania. The Company is currently laying a temporary sales pipeline to test the first well. As a reminder, St.
Mary has a total acreage position of approximately 41,000 net acres in McKean and Potter Counties in north central Pennsylvania.
Exxon Mobile XOM - XOM has a small position in the Marcellus Shale. Exxon has 19,400 acres in Lycoming & Tioga Counties in Pennsylvania
Exxon Mobile August 2009 Update - As you know we are active in the Marcellus
and have been acquiring some acreage in that area. We did elect to exercise our option and acquire some additional acreage.
We now got about 19 or 20,000 acres in the play and that came from the resale of '08, we're active in there evaluating some
new areas. But I really don't have any specific update other than that in terms of what's going on. And as you know that's
just one of many of our non-conventional gas plays that we are progressing around the world and that's in the U.S. of course
with the Marcellus.
Talisman Energy TLM - Talisman’s Marcellus Shale play, located in New York and Pennsylvania,
is an area of focus for 2009. The Company holds 800,000 net acres of undeveloped land in this play. The majority of the land
is in New York, where the State continues to review its environmental assessment procedures and regulations for operations.
This is effectively preventing horizontal drilling activities. As a result, the focus for the time-being will be Pennsylvania
where Talisman holds 140,000 net acres of highly prospective land, including recently acquired State lands. In 2008, the Company
drilled a total of six gross (5.0 net) wells. Talisman plans to drill up to 36 gross (34.8 net) wells and possibly acquire
new lands. The 2009 drilling program includes both pilot and development wells with the development focus beginning mid-year..
Ultra Petroleum UPL - UPL is very active in the Marcellus Formation - During the first quarter, Ultra increased its position in Pennsylvania
to 321,798 gross (171,613 net) acres from 287,745 gross (152,227 net) acres at year-end 2008. With the expanded acreage position,
the company plans on drilling 21 wells during the year, an increase from the previously planned 19 wells. The company is analyzing
the 3-D seismic that was completed earlier this year. As part of the evaluation of the Marcellus, the company is currently
drilling its third horizontal well and is in the process of completing the first of two recently drilled horizontal wells.
November 2009 Update - During the third quarter, Ultra drilled 12 horizontal Marcellus wells, with an average lateral length of just over
4,000 feet. Another 15 to 20 horizontal Marcellus Shale wells are planned to be drilled during the fourth quarter. This
brings the range of the total number of horizontal Marcellus Shale wells that Ultra plans to drill in 2009 to between 34 to
39. The company’s first production in the Marcellus horizontal program began in late July 2009. During the quarter,
seven wells were brought on-line with IPs averaging 6,420 Mcf per day. The company’s four pipeline interconnects to
major interstate pipelines remain on schedule and well ahead of the drilling campaign, with a total capacity of over 300 MMcf
per day expected by year-end 2009.
- Equitable Resources EQT - Equitable controls more than 445,000 acres in the high pressure Marcellus
Shale Play throughout northern West Virginia and western Pennsylvania. On the Marcellus play EQT now has approximately 445,000 acres in the core Marcellus play this is an increase of about 45,000 acres the increase is due to about 13,000 leased acres that
we have acquired in P.A. and the rest is due to the impact of positive drilling results in West Virginia. Which expanded our
understanding of the size of the area underlying by high pressure Marcellus. Improvements some dramatic in both drilling cost and completion effectiveness are causing us to
become increasingly bullish on this play even in the current price environment a great credit to the EQT team. Here are the
reasons why. Well costs for one as we discussed on the third quarter call have seen a marked improvement this year in 2009
on our third quarter we reported having achieved completed Marcellus
well costs of about $3 million per well we still think $3 million per well is a good number for the current lateral design.
We
are able to drill now in the most brittle section of the Marcellus and that seems to provide A, the most organic rig shale and B, the best place to frac. We have changed
our frac casing from 4.5 inches to 5.5 inches which lowers our treatment pressures and allows us to more consistently pump
the job as designed. Here we have also significantly reduced the spacing between pricked clusters from approximately 150 to
160 feet.
Well results for the Marcellus,
we have spent 53 horizontal wells to-date, 17 of those have been turned in line. We are expecting to drill 40 to 50 Marcellus wells in 2010. Green County in particular
in the fourth quarter we turned in line our best Marcellus
well, we call it the 167 well with which had a 30 day average initial production of 14 million cubic feet a day. This well
has been in line for approximately 37 days and is currently producing in the 12 million cubic feet a day range. Based on the
30 day IP rates, this well to our knowledge is the most prolific well drilled by industry in the Marcellus place so far. More on EQT
- Cabot Oil & Gas COG - Cabot COG has land in the Marcellus Shale development field particularly in West Virginia &
Pennsylvania. The Company has nine horizontal wells producing, three of which have produced over 1 Bcf. Seventeen horizontal
wells have been drilled so far in 2009, and 16 are drilling or remain to be drilled from six horizontal rigs that are currently
operating. To date, the Company's 24-hour initial production rates have ranged between 4.6 to 11.5 Mmcf per day, with 30-day
rates ranging from 3.5 to 10.9 Mmcf per day. "One year ago, Cabot was producing about 5 Mmcf per day from its Marcellus
position in northeast Pennsylvania," stated Dan O. Dinges, Chairman, President and Chief Executive Officer. "Today
we are producing over 50 Mmcf per day with a backlog of completions scheduled for the last two months of the year." Dinges
added, "Our two most recent completions have now been on line for about 40 days and are currently producing 6.5 Mmcf
per day each."
Cabot has recently added to its acreage position and now has over 170,000 gross acres in northeast
Pennsylvania. "From this position, we are expanding our efforts in 2010 to 73 horizontal wells and ten vertical wells,"
said Dinges. "This is more than a doubling of our effort and will account for two-thirds of our investment program for
2010." More on COG
- Hess Corp - HES - Marcellus Shale Update - As you have seen in the press, we partnered with Newfield for up to 140,000 acres
in the Marcellus with them. They will operate,
and then we will make an informed decision as we learn about the Marcellus and the areas where we are, as to whether we want to go bigger or smaller or whatever. So that is
kind of where we are.
- Atlas Energy Resources ATN - Atlas Energy ATN has drilled 98 Marcellus Shale
wells, of which 90 wells currently have normalized production approaching 25 million cubic feet ("Mmcf") per day
into a pipeline (8 wells are waiting on completion); As of September 30, 2008, Atlas Energy controlled approximately
555,000 Marcellus acres in Pennsylvania, New York and West Virginia, of which approximately 271,000 of these acres are located
in the Company's current focus area of southwestern Pennsylvania; ATN continues to realize average peak production
rates (24 hours into a pipeline) of approximately 1 Mmcf per day, with its best wells having initial peak rates of approximately
3.6 Mmcf per day The Company's last 13 vertical Marcellus wells have averaged initial rates of production of 1.3 Mmcf
per day, which is 30% higher than Atlas's prior average vertical Marcellus well.
- EXCO Resources XCO - In Appalachia, we hold in excess of 1.0
million net leasehold acres. Our major operating areas include Pennsylvania, Ohio, and West Virginia, where we historically
drilled for the Clinton/Medina sandstone, stacked Devonian sandstone, Devonian shale, Berea shale and other productive horizons.
Included as a subset of our extensive acreage position, we now control approximately 361,000 acres in the Marcellus shale
fairway, with more than 215,000 acres located in the core area of the over pressured Marcellus. A significant percentage of
this fairway acreage is held by production (HBP) by our shallow producing assets. Also as a subset of our acreage position,
130,000 acres (70% HBP) exist within the Huron Shale play of West Virginia. We believe our present leasehold position in the
Marcellus and Huron shale fairways contains 7–12 Tcf of potential reserves.
Throughout 2009, our technical Marcellus activity
is focused on integrating our 2008 Marcellus well results and seismic data, delineating our acreage blocks using our updated
geological model and drilling and completing test wells to high grade for a 2010 development program.
- Carrizo Oil & Gas CRZO - The Carrizo/Avista JV continues to ramp its drilling activity in the Marcellus
Shale. Since the end of the second quarter of 2009, the JV participated with Stone Energy to drill and case the Stang #1 (12%
CRZO WI) and initiated drilling the Loomis #1 (12% CRZO WI), both in Susquehanna County, Pennsylvania. After the interpretation
of newly acquired seismic data, the JV anticipates participating in its first horizontal Marcellus well when Stone spuds the
Loomis #4H (12% CRZO WI). On the JV's northern West Virginia leasehold, Carrizo is in the process of drilling the Geary #1
and has a second rig on location to spud the Lee #1.
- Dominion Resources D - Dominion Resources D has many Marcellus Shale acres. Dominion still holds
between 450,000 + acres after selling some to Antero for $3037 per acre. They are continuing to pursue other
transaction. January 2010 Update - Early indications from potential purchasers of our Marcellus
acreage show a very strong interest in our properties. Since we expect to begin to monetize the Marcellus acreage this year we expect to reach sufficient after-tax proceeds to offset
the need for all 400 million and plan to use market purchases to satisfy our dividend reinvestment in other automatic issuance
plans. This improves our ability to achieve our 2010 operating earnings guidance as our original outlook did not include the
Marcellus sale and assume the 400 million would
be met with new shares.
November 2009 Update - "With respect to Dominion's Marcellus shale acreage, we do not plan to develop this property ourselves, but rather
capture its value for our shareholders through an outright sale, a farm-out, or a similar transaction over the next two years,
depending on market conditions.
- Continental Resources CLR - Continental Resources ( CLR ) now has exposure to the Marcellus Shale. We now own 88,000 net acres in the Lower Huron, Rhinestreet Marcellus plays and continue to build on our position. The bulk for this acreage is
located West Virginia, Ohio, and New York where the shales have at found debts of 1000 to 5400 feet. We're currently drilling
our first-four wells targeting Rhinestreet, then Lower Huron shales in Southeast, Ohio.
.
-
Marathon Oil MRO - Marathon Oil ( MRO ) is building a position in the Marcellus Shale ( Seeking Alpha ) - Marathon
is also building a position in the Marcellus
Appalachia play with 30,000 acres in hand of a targeted 100,000 total by year end. Drilling on our acreage is expected within
six to nine months.
Newfield Exploration NFX - Newfield Enters the Marcellus Shale - On October 14, 2009, Newfield announced the signing of a joint exploration
agreement with Hess Corporation in the Marcellus Shale play. The agreement covers up to 140,000 gross acres primarily in Susquehanna
and Wayne Counties, Pennsylvania. Newfield will operate the new venture with each company having a 50 percent interest. The
2009 portion of Newfield's Marcellus Shale activities will be funded within the Company's existing $1.45 billion capital budget.
Drilling operations are not expected to commence until 2010.
- CNX Gas CXG - CNX Gas is active in the Marcellus Shale, particularly in Southwest, PA. CNX Gas Corporation (NYSE: CXG) has
leased nearly 40,000 acres having Marcellus Shale potential in two separate transactions. These transactions raise the total
acres held by CNX Gas in this play to 230,000 acres.
In the Marcellus
Shale, CNX Gas drilled, completed, and brought online its sixth, seventh, and eighth horizontal wells during the quarter.
The peak daily production from these wells was 3.7 MMcf, 3.2 MMcf, and 4.1 MMcf, respectively. Drilling and completion
costs continue to improve. As previously reported, the fifth well in the table cost $3.8 million. The wells drilled during
this quarter cost $3.5 million or less.
The company is now using a top hole rig to drill the 6,000-ft. vertical portion
of its Marcellus Shale wells, while using its one horizontal rig to drill into the curve and the nearly 3,000-ft. lateral.
This paired rig concept has had the effect of increasing the number of horizontal wells that the company can now drill every
month from one to two. It is also helping to lower costs.
CNX Gas is also placing more wells on a single pad. The eighth
well drilled was the third to be drilled on a single pad. By year-end, CNX Gas plans to increase the number of horizontal
Marcellus Shale wells drilled from a single pad to six.
- Petroleum Development Corp PETD - The
Appalachian Basin includes our West Virginia, Pennsylvania, New York and Tennessee operations, in which we own an interest
in approximately 2,090 gross, 1,566.4 net oil and natural gas wells. Our leasehold position encompasses approximately 140,300
gross acres with approximately 19,400 net undeveloped acres remaining for development as of December 31, 2008. We drilled
63 gross/net wells in the area in 2008 and produced approximately 3.9 Bcfe net to our interests. The majority of our Appalachian
leasehold is Devonian and Mississippian aged tight sandstone reservoirs. We are currently evaluating the potential of the
Marcellus Formation in West Virginia and Pennsylvania and have drilled three tests to date in West Virginia.
- Trans Energy TENG - Trans Energy is very active in the Marcellus Shale and has announced in Jan 2009 a Marion County, WV well. TENG announced
that its Blackshere #101 well in Marion County, West Virginia was successfully fraced on December 29th and is currently
awaiting connection to a sales line. The Blackshere #101 is completed in the Marcellus shale, a prolific new “resource
play” in Appalachia, similar to the Barnett, Fayetteville and Haynesville shales which have grown to become a significant base of hydrocarbon reserves in the United States. James K. Abcouwer,
President and CEO of Trans Energy, said “This fourth Marcellus well is located in Marion County which is the county
to the east of our existing Marcellus wells and is a step out of what we consider our proven area. We are delighted
with its initial indications. We are optimistic that the positive results from our three vertical wells in Wetzel
County and now with our most recent completion in Marion County can be replicated throughout our acreage position in northern
West Virginia. We’re now beginning a horizontal well program in yet another significant step forward for Trans
Energy to properly develop its acreage position. We’re pleased to have achieved this sizeable acreage position
centered on the Wetzel-Marion-Doddridge Counties area, which looks to be one of the most – if not the most
– prolific part of the Marcellus resource in Appalachia.”
Stone Energy SGY - Appalachian Basin (Marcellus Shale Play). Stone currently has more than 30,000 net acres leased in the
Marcellus Shale Play. Stone is producing from three vertical Marcellus wells in West Virginia and three additional vertical
development wells in West Virginia have been drilled and expect to be completed, hydraulically fractured, and tested through
existing gathering systems within the next few months. Stone expects to drill another 4 or 5 wells in West Virginia during
the remainder of this year as well as 2 or 3 wells in Pennsylvania. Stone is permitting a number of additional wells in the
Marcellus Shale Play and expects to ramp up drilling activity in 2010. The Company is also engaged in activities to enhance
its current leasehold. Stone is designated operator on most of its leasehold and currently owns at least a 50% working interest
in all leases.
Pioneer Drilling PDL - During the second quarter, we established an Appalachian
drilling division to focus on operations in the Marcellus Shale. We currently have one drilling rig
operating in our Appalachian division, with a second rig expected to begin operating by late August
2009. In addition, we launched wireline operations in the Marcellus Shale play.
Exobox Technologies (EXBX.PK) - Exobox Technologies Corp. (EXBX) (the “Company”) announced that one of its board members has identified
and assisted management in entering into a non-binding letter of intent to acquire 15 income producing oil & gas wells
in the Clinton and Marcellus Shale region in Ohio from a private oil & gas company. These oil & gas wells have a represented
PV10 reserve value of approximately $22.5 million (based on current NYMEX pricing). It is intended that the cash flow and
net worth from the oil and gas assets, will assist to further develop the Company's software products and technologies, as
well as those oil and gas assets being acquired. The parties intend on executing a definitive agreement on or before October
19, 2009.
