American Oil and Gas Reporter - August 2017 - 87

SpecialReport: Marcellus/Utica Update
Existing Pads
Degner says Range Resources plans
to turn a total of 116 Marcellus wells to
sales this year, consisting of 39 in its super-rich area, 45 in the wet gas area and
30 dry gas wells in southwestern Pennsylvania, in addition to the two dry gas
wells recently completed in northeastern
Pennsylvania.
In addition to drilling longer laterals,
lowering costs and increasing recoveries
in an effort to improve capital efficiency,
he says Range also will drill approximately
one-third of its 2017 wells from existing
pads. "As the play unfolded, we started

to think long-term," Degner relates. "Initially, most of our pads had four-six
wells, but we plan for the ability to put
up to 20 wells on each pad."
By being able to go back to a pad site,
he says the company believes it will save
$200,000-$500,000 a well.
The average EUR for Range's wet
gas wells is 2.5 Bcfe-3.0 Bcfe per 1,000
feet, according to Degner. "Some areas
are stronger," he adds. "Because Range
was an early mover in the play, we have
been ahead of some of the constraints.
We have enough take-away, and we feel
good about our projects."

Range focused on infrastructure early
on, he notes, trying to think creatively to
get its natural gas liquids to premium
markets. "We were the first to take our
methane and ethane out of the basin," he
elaborates.
Degner says Range will remain dedicated to its recycling program, as well.
He says the company is recycling 100
percent of its flowback water and has facilitated water agreements with other operators to take their produced water too.
By doing that, he reports, Range has to
use freshwater for less than 50 percent
of its hydraulic fracturing operations. r

Appalachian Basin Builds On Success

PITTSBURGH-The Appalachian
Basin continues to see a resurgent rig
count in 2017, as the oil and gas industry
rebounds through efficiency measures,
consolidation and an increase in business
opportunities related to shale gas development and its impact on upstream, midstream and downstream industries, a Babst
Calland report details.
In its seventh annual energy industry
report, Upstream, Midstream and Downstream: Resurgence of the Appalachian
Shale Industry; Legal and Regulatory
Perspective for Producers and Midstream
Operators, law firm Babst Calland traces
how the basin's industry is evolving to
confront economic, regulatory, legal and
local government challenges.
According to Babst Calland, the shale
gas industry continues to provide Ohio,
Pennsylvania and West Virginia with
significant economic opportunities
through employment and related revenue
from developing well sites, pipelines
needed to move gas to markets, and
new downstream users. The report points
to Shell Oil Company's $6 billion plans
to build and operate a polyethylene facility west of Pittsburgh as one example
of the expanding downstream market,
and indicates other manufacturing firms
are expected to establish facilities to
capitalize on the energy and raw materials produced from the Marcellus and
Utica shale plays.
"Over the course of the last year, significant changes have occurred in the
political landscape that are expected to

affect the energy industry across the
country," Upstream, Midstream and
Downstream says. It lists the election of
President Trump and new executive orders
that promise to lead to more pipeline development, reduced federal oversight of
the oil and gas industry, and increased
access to oil and gas reserves as only
some of those changes.
"However, many nongovernmental organizations have vowed to challenge the
Trump administration's initiatives while
many state and local governments have
signaled their intention to take greater
roles in regulating the oil and gas industry,"
the report states. "2017 promises to be
an exciting year as these competing political forces play out."
Challenges And Opportunities

"This report provides perspective on
the challenges and opportunities of a
resurging natural gas industry in the Appalachian Basin, including: the divergence
of federal and state policy that creates
more uncertainty for industry; increased
special interest opposition groups on new
issues and forums despite their lack of
success in the courts; and the expansion
from drilling to midstream development
and now to downstream manufacturing
that demonstrates the emergence of a
more diverse energy economy," says
Joseph K. Reinhart, shareholder and cochairman of Babst Calland's Energy and
Natural Resources group.
Upstream, Midstream and Downstream
contains six sections that each address

key challenges for oil and gas producers
and midstream operators:
* In business issues, gas producers
must focus on reducing costs and improving efficiencies as they adapt to the
new price environment. Targeting efficiencies, producers continue to focus on
consolidating their activities geographically.
* State and federal governments remain active in a changing regulatory
landscape as developments in the state
environmental standards for enforcement,
air, water and waste management in
Pennsylvania, West Virginia and Ohio,
as well as anticipated initiatives from
nongovernmental organizations will continue to impact production and midstream
operations.
* Pipeline safety legislative and regulatory developments continue to shape
the oil and gas industry through the U.S.
Department of Transportation's Pipeline
and Hazardous Materials Safety Administration's pipeline safety program. According to Upstream, Midstream and
Downstream, it is unlikely PHMSA's enforcement policy will shift dramatically
in 2017.
* Litigation trends, including a number of alleged nuisance claims, continue
to travel through Appalachian Basin
courts. Materials discussing alleged health
effects from unconventional gas development continue to be disseminated at a
record pace by industry opposition groups,
the report warns. Air quality data collected
by objective parties around shale development during the past six years using
AUGUST 2017 87
American Oil and Gas Reporter - August 2017

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