Range Resources Press Release (Feb 24)
Range Announces 2009 Results
Range Resources held an investors conference call today, and released a report on the health of the company for 2009, with predictions for 2010. In advance of the call, they issued a comprehensive press release detailing all of their operations. Below is the portion of the release dealing with Range’s drilling activities in the Marcellus Shale. Although originally the information below was in one large paragraph, MDN has formatted it to be more readable.
From the press release:
During the fourth quarter, the Marcellus Shale division continued to make outstanding progress. Most notably, we drilled and completed our first two horizontal wells in the northeastern portion of the play in Lycoming County, Pennsylvania. The average seven-day test rate for the first well was 13.3 Mmcfe per day, while the average seven-day test rate for the second well was 13.6 Mmcfe per day. These two wells are now shut-in awaiting pipeline hook-up. The pipeline to the first well is expected to be completed late in the fourth quarter of 2010 with the pipeline to the second well expected to be completed in 2011.
We also drilled our first horizontal Upper Devonian Shale well and our first horizontal Utica Shale well. The Upper Devonian well has been completed and is testing, and the Utica well has been drilled and cased and is awaiting completion.
Currently, Range’s net production in the Marcellus is approximately 115 Mmcfe per day. We have 31 horizontal wells that have been drilled, of which 26 are awaiting completion and five are awaiting pipeline hook up. In the southwest portion of the play, where we have drilled the majority of our wells and have been accumulating data for the past 2.5 years, the average estimated ultimate recovery for a Marcellus horizontal is 4.4 Bcfe gross.
Prior to August 2009, typical Range Marcellus wells had horizontal laterals that averaged 2,200 to 2,800 feet and were typically fraced with eight stages. Since then, we have been experimenting with longer laterals and more frac stages. The longer laterals range from 2,900 up to 5,000 feet and the higher frac stages range from nine stages up to 17 stages. As has been demonstrated in other shale plays, it appears that the longer laterals result in higher initial production rates, higher EURs and improved economics.
Currently we are running 13 drilling rigs in the play. Plans are to add more rigs in the fourth quarter and exit at 16 rigs. During 2010, we expect to drill and case 150 horizontal Marcellus Shale wells. For 2011, we plan to increase our rig count and exit the year with 24 rigs running. Finally, the build out of the Marcellus midstream infrastructure is progressing as scheduled. In the high Btu portion of the play, gross cryogenic processing capacity increased to 155 Mmcf per day in the fourth quarter of 2009, and an additional 30 Mmcf per day is expected to be added in mid-2010. Another 150 Mmcf per day has been requested for first quarter 2011, which will bring gross cryogenic processing capacity to 335 Mmcf per day. In the dry gas portion of the play, we have 160 Mmcf per day of pipeline tap capacity with 20 Mmcf per day of compression capacity in place currently. Plans are in place to steadily increase dry gas pipeline compression capacity to meet our needs.