Chesapeake 2Q17: “Rambo” Marcellus Well Produces Record 61 MMcf/d
Chesapeake Energy reported second quarter 2017 results last week. As is typical, the company hosted a conference call with analysts to discuss those results. However, Chesapeake CEO Doug “the ax” Lawler had some rather exciting news about the Marcellus to report–late breaking news. In recent weeks Chesapeake has brought online an experimental well drilled in Wyoming County, PA (northeastern part of the state) with an initial production of 61 million cubic feet equivalent per day (MMcfe/d). This is a MONSTER Marcellus well! The most productive onshore shale well we know of is EQT’s Utica well in Greene County, PA, with a 72.9 MMcfe/d IP rate, drilled in July 2015 (see EQT’s 1st Utica Well Shatters Record – 72.9 MMcf/d IP Rate!). The Chesapeake McGavin well in Wyoming County, with a 10,500 foot lateral, has the highest IP of any Marcellus well we’ve heard of. How did Chessy do it? They unleashed “32 million pounds of Hell on Earth” (meaning frac sand) to frack the well. Workers called it “the Rambo frac” because they needed to attack the formation like Rambo would a POW camp. The well cost is estimated to be $8.5 million–a tad more expensive that others they’ve drilled in the area, but a bargain with those kinds of flow rates. Below is the information we could glean about the “Rambo” well, along with the full update from Chesapeake for 2Q17…
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In May 2015, MDN brought you news that UGI Energy Services, a subsidiary of northeast PA utility giant UGI Corporation, announced they will spend $60 million to build a new LNG production plant in Wyoming County, PA (see 
Last Thursday some 450-500 supporters, oil and gas industry workers and politicians gathered at the Shadowbrook Golf Course in Wyoming County, PA to express support for Williams’ $3 billion, 198-mile Atlantic Sunrise Pipeline project, most of which will get built in northeast Pennsylvania. The event was organized and sponsored by Cabot Oil & Gas, one of the major beneficiaries of the pipeline, and Williams, which will build and operate the pipeline. The overall purpose of the event was to give a metaphorical kick in the rear-end of Gov. Tom Wolf and his Dept. of Environmental Protection (DEP), which appears to be intentionally dragging its feet with granting stream crossing permits–about the only thing left before the backhoes fire up and start digging. The event, held from noon to 2pm, began with lunch–barbecue pulled pork and chicken–followed by a series of short speeches by political leaders from the region. With people gathered at tables, and some standing, a half dozen speakers stood on a giant flatbed trailer underneath what has to be the biggest American flag MDN editor Jim Willis has ever seen, hoisted and held between two large cranes (see the pic). The upshot of the speeches can best be summarized in a single statement delivered by Alan Hall, Chairman of the neighboring Susquehanna County Board of Commissioners, when he said: “It’s time to kick the politicians in the ass and get this [pipeline] done.” There were some other great one-liners too…
Yesterday saw the first two (of four) public hearings being hosted this week by the Pennsylvania Dept. of Environmental Protection (DEP) to elicit comments on the proposed $3 billion, 198-mile Atlantic Sunrise Pipeline, an expansion of Williams’ Transco Pipeline system. One of yesterday’s meetings was held in Lancaster (Lancaster County), and the other in Tunkhannock (Wyoming County). The striking thing about both meetings is that they were not the usual circus freak shows by anti-fossil fuelers we’ve come to expect. Indeed, in both venues, an overwhelming majority of those speaking were there to speak IN FAVOR of the projects. Oh, there were detractors, to be sure. Nonsensical statements made by people like Malinda Clatterbuck, one of the locals in Lancaster who is attempting to turn Lancaster into another North Dakota fiasco. Clatterbuck said “angst over the pipeline has caused premature births, divorces and heart attacks” among people she knows. Complete rubbish. Anyone can say (or do) anything at these hearings. Mark Clatterbuck (Malinda’s husband) also spoke. Mark was a protester in North Dakota against the Dakota Access Pipeline. He warned (threatened?) DEP representatives of a coming “community uprising” against the Atlantic Sunrise pipeline. Even though there was some opposition like the clattering Clatterbucks at last night’s hearings, the big news is that their opposition was drowned out by supporters of the pipeline project. And that’s good news for all Pennsylvanians…
Pennsylvania’s landowners, at least many of them, continue to be angry about getting low–or no–royalty checks. That’s not what they signed up for when leasing their property. A group of 200+ landowners packed a meeting last week in Wyoming County, PA to discuss the situation, and what to do next. The meeting was organized by the Pennsylvania Chapter of the National Association of Royalty Owners (NARO). One distinct possibility raised at the meeting: force Chesapeake (and others) into arbitration. NARO’s approach is to push for legislation, specifically PA House Bill (HB) 557 (see 
One year ago, Banpu Pcl, Thailand’s largest coal producer, invested $112 million to purchase Range Resources’ Marcellus non-operated JV operations in Bradford County, PA (see 
MDN first told you about IMG Midstream in August 2014 (see 
As sometimes happens, Williams has had to file 27 eminent domain lawsuits against landowners in northeastern and central Pennsylvania–landowners who have refused to negotiate with the company to allow the now FERC-approved Atlantic Sunrise Pipeline to cross their property. We understand the reluctance of some landowners who would rather not have the pipeline cross their property. But we also understand the necessity of the project–and the need to be reasonable. Some landowners are not reasonable. And so eminent domain is a rare, option-of-last-resort necessity in those cases. But don’t shed too many tears for landowners now being sued. One PA landowner in Luzerne County (Wilkes-Barre area) was originally offered $260,000 for an easement on 7.6 acres of land ($34,211/acre!). He refused. The price has now dropped to $225,000. Guess he should have signed before eminent domain was on the table…
One of the issues that isn’t going away is the demand by landowners in some Pennsylvania counties, like Bradford, for lawmakers in the state to pass a bill that guarantees them what they believe they are already guaranteed–a 12.5% minimum royalty, based on a 1979 law that states they should get such a royalty. We’ve extensively covered what we call a civil war between two parties who are otherwise friendly toward each other–landowners and shale drillers. Last year the issue came to a head with House Bill (HB) 1391 (
Way back in May 2014 MDN told you that UGI Energy Services, a subsidiary of UGI (a utility company in northeast PA) would build two new pipelines in northeast PA for $80 million that will allow them to transport cheap, abundant, locally extracted natural gas from Cabot Oil & Gas in Susquehanna County to residents in the greater Scranton/Wilkes-Barre area (see