Range Resources Corp. said Friday that three test wells drilled to the south of proven acreage it recently acquired in North Louisiana show the kind of long-term potential management had hoped for to move forward with development of new fields.
The company acquired those assets in the Cotton Valley Sands Terryville Complex last year in a $4.4 billion all-stock deal from Memorial Resource Development Corp. (MRD). Range moved south of the Terryville in Lincoln Parish last year to test three different Lower Cotton Valley extension wells in Jackson Parish to get a better idea of how the new horizons in the Vernon Field should be rolled into its plans for this year and next.
"These initial three tests confirm that the Lower Cotton Valley pay section thickens as we move towards the Vernon Field, the gas-in-place increases and there are multiple stacked-pay targets," said CEO Jeff Ventura of the results. "While remaining very focused on our core assets in the Marcellus and Terryville, we will look to expand on the initial results from the extension area by methodically testing additional targets throughout this year."
MRD was mostly focused on the Terryville to the north of the new wells. Range said it saw significant gas shows in multiple zones across the Upper and Lower Red intervals of the Lower Cotton Valley extensions. They were drilled on the north, east and west sides of the Vernon Field. The western well had a 24-hour initial production (IP) rate of 12.4 MMcf/d on a 5,050-foot lateral, while the eastern well came on at a peak 24-hour rate of 23.3 MMcf/d. Range noted those rates were constrained.
The northern well had a constrained 24-hour production rate of just 5 MMcf/d. Wells Fargo Securities said that by comparison, MRD posted average 30-day IPs of 23.8 MMcfe/d in 2015 on 7,000-foot laterals in the Terryville Upper Red, saying Range's results are encouraging, but adding that more results would be needed to draw firm conclusions about the extension area’s potential. Range has already received permits for more extension wells.
Including its acquisitions, Range also said it increased proved reserves by 22% to about 12 Tcfe, replacing 292% of its production in 2016. Field level performance, along with improving efficiencies and longer laterals drove the increase.
To boost future reserve growth, Range said a small portion of its future development capital, or $2.2 billion over the next five years, would be allocated to its proven locations, with the remainder going toward delineating unproven locations. Year-end proved reserves were 65% natural gas, 31% natural gas liquids and 4% crude oil and condensate.