American Oil and Gas Reporter - November 2015 - 101

SpecialReport: Marcellus/Utica Activity
firm," he details. "We are completing negotiation and preparation of the final
stage of a definitive agreement. Successful execution of the Utica joint venture,
combined with production pad drilling in
southeastern Ohio, are expected to result
in a significant increase in proved reserves."
Evans says Magnum Hunter expects to
spend $100 million-$200 million in drilling
and completion in 2016. He goes on to note
that the company's midstream subsidiary,
the Eureka Hunter Pipeline System, located in Ohio and West Virginia, continues
to expand and is a valuable asset.
"We have built 200 miles of 20-inch
pipe (in Ohio and West Virginia)," he relates. "We had record throughput volumes
of 700,000 MMBtu/d in the second quarter of 2015, and we expect throughput volumes to further increase by year-end
2015 900,000 MMBtu/d to 1.0 Bcf/d. We
continue to build up the system with
more than 10 interconnects. It is becoming a hub with our processing capacity
downstream."
Triad Hunter LLC, a wholly-owned
subsidiary of Magnum Hunter Resources,
produces about 20 percent of the gas in the
Eureka Hunter Pipeline System, Evans reports, while the other 80 percent comes
from about a dozen third-party producers.
"We are dealing with $2.40 gas, so
everyone is in hunkered-down mode," he
describes. "Operators are working to
hold onto acreage. More pipeline will help,
but until the liquids price improves, there
will not be much Marcellus drilling. Because the Utica has big volumes and is
easy to drill, I think the Utica will become
the price point for natural gas in the United States."

ark pads.
"Warren's first two Upper Marcellus
wells were drilled with the intent to test
a wide swath of our acreage block,"
Lance Peterson, interim CEO of Warren
Resources explains in the company's
press release. "Warren is very encouraged
by the early results from these wells, and
we expect to see these wells continue to
clean up and experience increased flow
rates."

A successful test of the Upper Marcellus potentially could add more than 40 additional locations on Warren's acreage
block, the company indicates, but no reserves were booked at year-end 2014 for
the Upper Marcellus locations.
The company claims the Upper Marcellus formation in its acreage block is 180
feet thick, compared with the Lower Marcellus in the same area, for which the thickness measures 120 feet.
❒

Upper Marcellus
Although a considerable portion of independent operators' focus in the Appalachian Basin has been directed at the
stacked pays in southwestern Pennsylvania and the bordering counties in Ohio and
West Virginia, northeastern Pennsylvania
continues to see some action.
Warren Resources Inc. announced on
Aug. 18 that it had drilled and set pipe for
two Upper Marcellus wells in Wyoming
County, Pa., in the first quarter and began
completion operations in July. The two Upper Marcellus wells had a combined daily production rate of 17 MMcf/d with 3
percent flowback recovery in the first two
weeks of production. The wells were
drilled from Warren's Mirabelli and RuNOVEMBER 2015 101

http://www.steptoe-johnson.com/study http://www.steptoe-johnson.com

American Oil and Gas Reporter - November 2015

Table of Contents for the Digital Edition of American Oil and Gas Reporter - November 2015