Full Speed Ahead in the Marcellus for Chevron & Exxon Mobil
Not every driller is pulling back from drilling natural gas to focus on oil and gas liquids. In fact, for two of the largest energy companies in the U.S., it’s full speed ahead with drilling in the Marcellus. Those two companies? Chevron and Exxon Mobil. Chevron is planning to double its drilling in the Marcellus in the near term.
From a recent story in the Wall Street Journal:
Greg Hild, a Chevron Corp. geologist overseeing some of the company’s natural-gas drilling in the vast formation known as the Marcellus Shale, said he isn’t too worried about the commodity’s rock-bottom prices these days.
What interests him, he said recently…is whether Chevron is moving fast enough. He wants to increase drilling, and quickly transfer the knowledge the energy company is acquiring to gas fields in Poland, Romania and Canada, to slake a growing thirst for gas in Asia and Europe.
"We don’t want to slow down or certainly release any of the resources we have because it will make it very difficult to get back on track," said Mr. Hild, 51 years old, who has spent more than two decades trotting the globe for Chevron. "We want to get to where we can drill more and more wells per year and get very efficient at it."
The San Ramon, Calif., company, which owns more than 700,000 acres in the Marcellus, plans to double drilling there to 200 wells a year in the near future, from about 100 in 2011.
Chevron’s stance echoes Exxon Mobil Corp.’s January announcement that it has no intention to slow down gas drilling due to low prices. Exxon Mobil became the largest natural-gas producer in the U.S. after it bought XTO Energy in 2010 for $25 billion.
Analysts say that unlike their smaller rivals, Exxon and Chevron don’t have to fret about short-term prices because they are convinced prices will rebound as the economy recovers. Exxon and Chevron, the two largest U.S. oil companies by market value, also have deep pockets to tide them during turbulent times.
Chevron is so focused on mastering shale-gas production that it has no rush to produce oil from the 623,000 acres it acquired via the Atlas purchase in the Utica Shale, an oil-rich layer of rock located mainly in Ohio and Pennsylvania. The Utica has become a hot spot among companies temporarily switching from gas drilling toward more profitable oil. Chevron plans to drill a few exploration wells in the Utica this year, but said developing its Marcellus acreage is its priority.*
*Wall Street Journal (Mar 11, 2012) – Chevron Plays Catch-Up in Shale Gas