Range Resources Has Banner Year in the Marcellus Shale Play, Expects Even Bigger Results in 2011 and Beyond

Range Resources, one of the largest drillers in the Marcellus Shale, recently released year-end results (yes, more earnings statements!). And they have some big news about the Marcellus buried in their report. Namely, Range currently produces 260 million cubic feet of of natural gas per day from their Marcellus Shale operations, and they are on track to produce 400 million cubic feet by the end of 2011. Range says by the end of 2012 they will be producing 600 million cubic feet. Eventually? They think they can reach billions of cubic feet of gas per day.

During the fourth quarter, Range’s Marcellus division brought online 11 horizontal wells in southwestern Pennsylvania, nine of which were located in the liquids-rich wet area of the play. With the Lycoming County gathering system now online, five wells were recently turned to sales in this area with an average production rate of 9.0 (7.9 net) Mmcf per day per well. Twenty additional horizontal wells are expected to be brought online in the northeastern portion of the play by third quarter 2011. Earlier this month, Range completed a significant Marcellus step-out well in the southwest portion of the play, which tested at 18.6 Mmcfe per day on a five-day test. Current production in the Marcellus is approximately 260 Mmcfe per day net, from both the southwest and northeast areas. At the end of the year, the Marcellus division had drilled 52 horizontal wells that were waiting on completion and 15 wells waiting on pipeline connection. Range is well on schedule to achieve its Marcellus Shale year-end 2011 production exit rate target of 400 Mmcfe per day net.(1)

Range is excited about the aforementioned “step-out” well:

Range is particularly excited about a new “stepout” Marcellus well in southwest Pennsylvania that yielded the equivalent of 18.6 million cubic feet of natural gas per day on a five-day test.

“It is our very best well yet,” Range Senior Vice President Rodney Waller told the Star-Telegram today.  It’s called a step-out well because it is 35 miles “from where the heart of our drilling is,” and thus offers a promising new area for development, Waller said.

[Range CEO John] Pinkerton said Range believes that it ultimately will realize net production equivalent to two to three billion cubic feet of gas per day from the Marcellus.(2)

Just for perspective, 2-3 billion cubic feet of gas per day would be half the daily production from all of the gas producers in the Barnett Shale play. That’s a big deal.

(1) Range Resources Press Release (Feb 28) – Range Announces 2010 Results

(2) Star-Telegram Barnett Shale Blog (Mar 2) – Range Resources: Triple play in Marcellus