Marcellus Remains Driver of US Shale Gas Revolution

The Utica play has become more a gas story than a liquids play, with operators, including Aubrey McClendon’s American Energy Partners, focusing on the wet gas window in Belmont and Monroe counties in southeastern Ohio. Oudin noted that 19 of the top 20 Utica wells in last year’s fourth quarter were drilled in Belmont County. Production from these wells is 90 percent gas, but rival wells in the Marcellus’ Susquehanna core in terms of test and IP rates. With 24 hour test rates of 40 million cubic feet per day, wells in Belmont County, Ohio equate to a 12 Bcf/d well in Susquehanna and offer significant potential.

Low U.S. gas prices has resulted in some players selling non-core Utica assets in northern and western Ohio, and more divestitures are anticipated, said Oudin. Drilling in the Utica oil window has died off in the past year or so. A few smaller operators are running rigs here, and Chesapeake and other operators are still testing here, but the rig count has fallen and a number of players are exiting their positions here.

Operators also are starting to explore the Upper Devonian play in the Northeast, primarily targeting the Rhinestreet, Burkett and Geneseo formations. The Upper Devonian offers similarities to the Marcellus, with strong potential for rich gas production, but full scale development will not take place till late 2015/early 2016 as operators focus on core Marcellus assets.

Companies such as Range Resources and Anadarko Petroleum Corp. are testing the play’s stacked pay potential in the southwest and northeast. The Upper Devonian’s middle formation is not as productive, meaning development will likely mimic the Marcellus’ northeast-southwest pattern.

Upper Devonian wells are expected to have smaller recovery rates of 3 Bcf per well, but operators could maximize Marcellus infrastructure and achieve cost savings of $300,000 to $850,000 a well through dual zone development from multi-well pads. Wells in the play are thinner and smaller well recoveries are expected 3 Bcf/ a well – but operators could maximize infrastructure build for Marcellus – and achieved 300 to 850,000 a well cost savings through dual zone or tri-zone development off multi-well pads.


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