PA Gas: Not even Close to Full Developement - The Outdoor Community
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post #1 of 1 (permalink) Old 04-13-2014, 12:53 PM Thread Starter
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PA Gas: Not even Close to Full Developement

The Appalachian Basin is still a puzzle, but there is no lack of enthusiasm for those trying to solve all the value it may hold.

After roughly seven years of unconventional exploration and development, more natural gas and liquids are flowing in Ohio, West Virginia and Pennsylvania. Operators are accelerating their development plans and maximizing their estimated ultimate recoveries with longer laterals, shorter fracturing (fracking) stages and well pads that seem to expand by the month.

More important, though, the parameters of the basin continue to shift. The Utica Shale has not yet been clearly delineated in a way that presents a sweet spot that the industry can agree on. Similarly, the Upper Devonian formations across the basin, particularly in Pennsylvania, are only now being tested by horizontal wells. Meanwhile, the veritable Marcellus Shale continues to surprise producers with the high volume of varying hydrocarbons across a fairway that straddles three states.

"I hear this a lot,” said Consol Energy Inc.’s Andrea Passman, director of engineering for gas operations, at the NAPE East business conference in Pittsburgh on Wednesday. “Even before I moved here, people would say 'there's a great opportunity, we'll get there. Everyone kept saying to me 'we'll get to where the Barnett and the Eagle Ford and the Permian Basin are...We're not going to get there; we already are there. We are in the development, we're trying to get to gas factory mode. This is a great chance to accelerate what we saw in other basins and do it much quicker here in the Appalachian Basin.".........

Like many operators across the basin, Consol’s average lateral lengths are extending; the average lateral of its wells is set to increase this year to 7,500 feet at most locations and stretch as long as 10,000 feet in a few others. The company is completing wells with frack stages spaced at 150 feet or less, which means 60-70 stages per well, Passman said. Meanwhile, it is considering constructing drilling pads that can handle between 18 and 24 wells..........

The basin's multiple pay horizons could mean at least 35 years of sustained development, Passman said. Talisman Energy Inc.’s Rick Kessy, vice president of the Marcellus delivery unit, said at the conference he thought development in the basin could last 100 years.

Passman said she didn't believe development had even hit full stride in Ohio, as many analysts and other operators have noted. She argued that operators would need to keep delineating acreage in some parts of the state. There remains little knowledge about the play's oil window and she projected that activity would increase significantly in early 2015.

MarkWest Energy Partners LP's Greg Floerke, senior vice president of the Northeast division, agreed, adding that the midstream operator can't yet predict what peak production in both the Utica or the Marcellus might look like in the future. With 385 MMcf/d of gathering capacity and another 585 MMcf/d of cryogenic processing capacity, MarkWest is Ohio’s largest processor of wet gas (see Shale Daily, Feb. 3). It also has 2.2 Bcf/d of processing capacity in the Marcellus and is currently at work on another 19 projects in the Appalachian Basin.

"I think what's unprecedented is the rate at which we're building some of these processing facilities. I was down in the Barnett. I worked there and it was bone-dry gas," Floerke said. "The western Marcellus and the Utica are so different. It's rich gas, there's a lot of liquid and it has a high ethane content.

"The last thing a midstream company wants to do is overbuild," he added. "The fact that we are continuing to build and expanding the way we are is testament to how confident we are that the drilling and production will continue here."

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