CONSOL 4Q15: All About that Utica, ‘Bout that Utica, No Marcellus

All About That BassLast Friday CONSOL Energy released their fourth quarter 2015 update and we couldn’t stop the Meghan Trainor song “All About That Bass” from going through our heads, changing the word “bass” to Utica and “treble” to Marcellus. CONSOL was positively effusive about their Utica program and what it means for the future of the company. And well they should be (pun intended). In 4Q15 CONSOL drilled and brought online it’s most initially productive-ever Utica well, the GH 9 in Greene County, PA. The well’s initial flow was 61.9 million cubic feet per day per day (MMcf/d). That’s not as high as EQT’s record-breaker of 72.9 MMcf/d, also in Greene County (see EQT’s 1st Utica Well Shatters Record – 72.9 MMcf/d IP Rate!), but still, it’s amazing output for the CONSOL well. That amazing second well comes on the heels of CONSOL’s first PA Utica well, drilled in Westmoreland County in 3Q15, with an initial flow rate of 61.4 MMcf/d (see CONSOL 3Q15: Natgas Production Up 33%, Natgas Revenue Down $56M). Here’s what really caught our eye about Friday’s update and accompanying analyst conference call: In the Ohio Utica, the first well CONSOL drilled took 84 days and the drilling phase cost them $9 million. By the fifth well, the cost had gone down to $5 million. And they now believe they can get the cost of drilling a Utica well down to $4 million and do it in 23 days. Astonishing! (Note: that number is not the “all in” cost, which still is still more than $15 million per well.) So what about CONSOL’s Marcellus program?…

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