EXCO Resources Marcellus Production Up 7% from 2011
EXCO Resources released their first quarter operational update on Tuesday. In the Marcellus Shale, EXCO is currently operating three drilling rigs with plans to drill 49 wells this year in the Marcellus. Most of EXCO’s drilling happens in Lycoming County, PA (Williamsport area).
The relevant portion of the EXCO update concerning the Marcellus:
Our current gross Marcellus shale production is approximately 116 Mmcf per day (20.2 Mmcf per day net), which represents an increase of more than 7% since the end of 2011. We have more than 35 Mmcf per day (7.4 Mmcf per day net) of production shut in due primarily to offset drilling and completion activities. We have implemented a development program within our acreage in northeast Pennsylvania and are concluding an appraisal program in central Pennsylvania. We plan to drill 49 gross (12.4 net) operated wells in the Marcellus shale play in our Appalachia region during 2012. Of the 49 wells, 46 gross (11.5 net) will be development wells and 3 gross (0.9 net) will be appraisal wells. Most of our drilling activity will be in Lycoming County, Pennsylvania where we are realizing our best returns in the Marcellus shale. We are currently drilling with three operated rigs in the play. Our net drilling dollars are reduced by the effect of the carry we receive from BG Group. Approximately $29.7 million of the carry remains available to us from BG Group as of March 31, 2012. We expect that the remaining carry will be used in 2012.
During the first quarter 2012, we spud 11 new operated wells and drilled and completed 3 gross (1.2 net) operated wells in the Marcellus shale. These three completed wells included two appraisal wells in Central Pennsylvania and one delineation well in Northeast Pennsylvania. The two Central Pennsylvania appraisal wells are currently awaiting pipeline connections. We are also focused on building our field infrastructure in support of our expected levels of activity. Along with efficiency gains derived from our drilling and completion program, these infrastructure investments are expected to be the primary drivers to reduce our average development well costs.*
*EXCO Resources (May 1, 2012) – EXCO Resources, Inc. Reports First Quarter 2012 Results (PDF)