American Oil and Gas Reporter - November 2015 - 99

SpecialReport: Marcellus/Utica Activity
Ventura adds. "This reduces our transportation cost while providing us with optionality. We should save $0.20 a gallon in transportation by being able to move propane by
pipeline to the Marcus Hook facility."
Range is one of the Appalachian
Basin's most prolific NGL producers,
Ventura reports, with 56,000 bbl/d of
liquids production in the second quarter.
"Higher Btu gas receives increased uplift
because it contains heavier NGLs," he explains. "In the second half of 2015, more
than 85 percent of our ethane is expected
to be priced off gas or oil-linked indexes,
rather than the Mont Belvieu, Tx., ethane
index."
Ventura urges anyone bearish about the
outlook for natural gas to consider the big
picture. The commodity has endured a
price slump since mid-2008, he allows, but
is on the verge of significant demand increases. "The U.S. is exporting a significant amount of natural gas to Mexico already and the first liquefied natural gas export facility comes online soon. We believe
about 10 Bcf/d ultimately will be exported," he says. "Also, most new power generation facilities will be natural gas-fired.
And there are a number of projects on the
Gulf Coast that will use natural gas as feedstock."
He says the Energy Information Administration projects natural gas demand
may surge an additional 20 Bcf/d by
2020 and an additional 15 Bcf/d by 2025.
"That is a 40 percent increase in demand," Ventura calculates. "The infrastructure buildup in southwestern Pennsylvania will continue in 2016 to keep up with
the new demand."

Operational Improvements
Denver-based Antero Resources says
its production in both the Marcellus and
Utica has attained new company highs.
"Our net daily production for the quarter averaged 1.5 Bcfe/d, establishing a
company record and exceeding expectations for the quarter, driven primarily by
operations efficiencies and tremendous
work by our operations teams," says Paul
Rady, Antero's chairman of the board and
chief executive officer in the company's
third-quarter operations update. "Thirdquarter production places Antero on track
to exceed full-year 2015 production guidance of 1.4 Bcfe/d, and positions Antero
to build toward the company's preliminary
2016 production growth target of 25-30
percent compared with 2015 guidance. We
feel confident in our preliminary 2016

growth targets, given our large inventory
of drilled but uncompleted wells, as well
as our industry leading hedge book, which
locks in virtually all targeted 2016 production at an average all-in hedge price of
$3.94 an MMBtu."
The company indicates its operational
improvements are driven by multiple enhancements, including increased mud circulation rates and improved plug drill-out
times. Antero reported its average budgeted cost was $1.14 million for every 1,000
feet of lateral in the Marcellus, a 16 percent improvement over 2014 well costs.
The company attributes 50 percent of its
well cost savings to service cost reductions
and the other 50 percent to operational efficiencies.
According to Antero, it has five drilling
rigs and two completion crews in the Marcellus. The company completed and
placed on line six horizontal Marcellus
wells during the third quarter. The average lateral length among the six wells was
10,300 feet and the average stage length
was 200 feet.
Three of the six wells had been on line
for more than 30 days by the end of the
third quarter and had an average 30-day
rate of 16.1 MMcfe/d while rejecting
ethane (25 percent liquids). Antero has expressed plans to complete 11 wells in the
fourth quarter.

Utica Projects
As its techniques for improving Marcellus projects' efficiency have proven successful, Antero says it also has applied a
number of them to the Utica play with similar gains. Antero says it is drilling and
completing wells at an average budgeted
cost of $1.29 million for every 1,000 feet
of lateral in the Utica, an 18 percent improvement over 2014 well costs. It estimates 65 percent of the well cost savings
originate with service cost reductions and
35 percent from operational efficiencies.
According to Antero, the company
completed and placed on line 25 horizontal Utica wells in the third quarter with an
average lateral length of 8,100 feet and an
average stage length of 180 feet. Four of
those wells are on the Loraditch pad,
which the company describes as the driest, most downdip Utica well the company has completed in Ohio. All four wells
were placed under the company's flowback management program and posted a
combined average 30-day rate of 64
MMcfe/d while rejecting ethane (15 percent liquids). The four Loraditch wells had
an average 30-day flowing casing pressure
of 3,400 psi.
Antero also reached total depth and
cased its first West Virginia Utica well in
Tyler County in the third quarter. It expresses plans to complete 12 wells in the
fourth quarter, representing three separate

The 205,000 net acres prospective for both the Marcellus and Utica held by Magnum
Hunter Resources Corporation straddle the Ohio River in three southeastern Ohio counties and six West Virginia counties. The company indicates it has 44 net horizontal wells
producing from the Marcellus and four net horizontal wells producing from the Utica.

NOVEMBER 2015 99

American Oil and Gas Reporter - November 2015

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