American Oil and Gas Reporter - July 2016 - 64

SpecialReport: Horizontal & Innovative Drilling
visioned today's development of the Marcellus and Utica plays.
"No," the president of EQT Corporation
replies emphatically. "It is a whole different
game now. Ten years ago, we were drilling
postholes. In 2006, we drilled 700 vertical
wells, and we were growing our production
in the single digits. This year, our drilling
plan includes up to 82 horizontal wells,
and our growth will be in the low 20 percent range."
"We were the 25th largest natural gas
producer in the country in 2006, and
never had drilled horizontal wells," adds
David Schlosser, EQT's executive vice
president for engineering, geology and
planning. "Today, we are the fifth largest
gas producer with more than 2,000 producing horizontal wells throughout the
Appalachian Basin."
Indeed, Schlotterbeck suggests, EQT is
emblematic of the change the Marcellus
and Utica resource plays have brought to
the historic Appalachian region. EQT has
660,000 acres in the Marcellus-split about
50-50 between West Virginia and Pennsylvania, although he says the company has
shrunk that to about 320,000 acres in what
he calls EQT's core development area.
"We have close to 800 producing wells
in the Marcellus and an additional 70

wells in the Upper Devonian, which is
located above the Marcellus," he enumerates. "About two-thirds of those are
dry gas and about one third are wet gas.
There is still a lot of economic development because of the quality of our acreage
in what I call the core of the core in
Washington and Greene Counties, Pa.;
and Wetzel County, W.V."
One reason EQT has been able to
continue to drill economically successful
wells during the downturn, Schlotterbeck
assesses, is the company's ability to improve operations. "Our drilling costs are
down 33 percent, and our operating costs
are falling in double digits," he says. "We
have employed aggressive cost controls."
Dave Elkin, senior vice president for
drilling and completions, says, "The key
is to keep rigs drilling. We move rigs 24
hours a day, so we have reduced moving
time by 50 percent. We are utilizing
zipper fracs to keep the frac crews pumping. We can complete more wells in a
shorter time."
Schlosser adds that EQT also is drilling
longer laterals, moving from 3,000- to
4,000-foot laterals to 7,000-foot laterals
this year.
"Although we continue to test and analyze the number of frac stages," he con-

As the fifth largest gas producer in the nation with more
than 2,000 producing horizontal wells in the Appalachian
Basin, EQT Corporation continues to build onto its portfolio of
pipeline capacity to deliver its
produced gas to a variety of
markets both inside and outside the Northeast region.

64 THE AMERICAN OIL & GAS REPORTER

tinues, "we have evolved to our current
setup of five clusters per 150-foot stage."
Elkin notes that EQT plans to drill 72
Marcellus wells and 5-10 Utica wells
this year, making it the biggest year for
the company's Utica program. While all
of EQT's Utica wells in Pennsylvania
are dry gas, Schlotterbeck says the Marcellus wells can be either wet or dry. "It
depends on where you are," he says.
"The Marcellus wells in Greene and
Washington Counties can be either one.
Our acreage in Wetzel County is mostly
wet. A couple years ago, liquids were a
lot more economical, but the wet/dry
price is similar now."
Marcellus Acquisition
EQT announced in May that it had
signed a definitive agreement to acquire
62,500 net acres and production of 50
million cubic feet of gas equivalent a
day from Statoil USA Onshore Properties
Inc. for $407 million. The transaction
was expected to close in early July.
Located primarily in Wetzel, Tyler
and Harrison Counties, W.V., the acquisition adds a sizeable amount of acreage
within EQT's core development area and
complements adjacent operations in Wetzel
County, according to Schlotterbeck.
He says the acquisition includes 31
Marcellus wells (24 producing) and approximately 500 undeveloped locations
that are expected to be developed with average lateral lengths of 5,600 feet. According to a company press release, since
much of this acreage is contiguous with
EQT's existing development area, the
lateral length of 106 existing EQT locations
now can be extended from 3,000 to 6,500
feet, which will reduce overall costs and
deliver stronger well economics.
The acquisition increases EQT's core
undeveloped Marcellus acreage by 29
percent, and includes drilling rights on
an estimated 53,000 net acres that are
prospective for the deep Utica.
Take-Away Capacity
One of the keys to developing the
Marcellus and Utica is finding a variety
of markets, according to Schlotterbeck.
"That is a critical factor with the Northeast's basis differential and discount to
the New York Mercantile Exchange," he
points out. "So, we have built a portfolio
of pipeline capacity."
Schlotterbeck says EQT has pipeline
capacity to the New York City/New Jersey
market areas, and has built the Ohio

American Oil and Gas Reporter - July 2016

Table of Contents for the Digital Edition of American Oil and Gas Reporter - July 2016