Stone Energy Corp. said it plans wrap up its Appalachian drilling program by the end of March, release its sole rig operating in the Marcellus Shale and suspend core operations in the region for the remainder of the year.
Under a capital budget announced late Tuesday, the Louisiana-based company said this year it would instead focus on Outer Continental Shelf and deepwater of the Gulf of Mexico, where it has interests in more than 100 blocks. Commodity prices and the sale of noncore assets throughout 2014 prompted the company to realign spending plans for this year.
The company cut 2015 spending to $450 million from last year’s budget of $825 million. Roughly 75% of company spending is directed for offshore operations. Only 8% of the budget would go toward Appalachia to acquire additional leasehold.
Stone has 90,000 acres under lease in West Virginia and Pennsylvania (see Shale Daily, Dec. 9, 2014; March 26, 2014). In 2014, Stone spent 26% of its budget in the Marcellus, where it drilled 38 wells and production averaged 100 MMcfe/d. Stone exited the year producing 42,600 boe, down from the 46,000 boe in 2013 following asset sales. The company expects to produce 39,000-43,000 boe this year.
In December, PDC Energy Inc. said it would complete a four-well Utica pad in Guernsey County, OH, and then idle its only rig in the region to focus on Colorado’s Wattenberg Field (see Shale Daily, Dec. 10, 2014).