Shale Daily / NGI All News Access

Marcellus Helps Range Post Record Production

Drilling in liquids-rich corners of the Marcellus Shale and Midcontinent region helped Range Resources Corp. post record production volumes in the first quarter of the year.

The Texas company produced 545.5 MMcfe/d net in the first quarter, up 17% from the same period last year and up 1% from the fourth quarter of 2010, Range said Tuesday. The company will hold a conference call for investors on April 27.

Despite reporting its 33rd consecutive quarter of production growth, though, those figures fall short of the target Range forecast for the quarter.

"Despite the unusually cold weather conditions we incurred in the first quarter, we were able to reach the midpoint of our production guidance," Range CEO John Pinkerton said. "Adjusting for the weather-related downtime, we would have exceeded the high end of our guidance."

Pinkerton said Range was still on track to reach its production growth targets for the year.

Range's net production in the Marcellus is now 260 MMcfe/d, up from 200 MMcfe/d at the end of 2010. That increase came in part from 26 new horizontal wells that the company brought online in southwest Pennsylvania during the quarter, including 15 in liquids-rich portions of the play. Those 15 new wells averaged an initial gross production rate of 10.1 MMcfe/d, or 7.4 MMcf/d, of natural gas and 452 b/d of natural gas liquids and condensate.

Range also brought online its first five wells in Lycoming County, a drier but more active corner of the Marcellus in northeast Pennsylvania, at a combined initial gross production rate of 45 MMcf/d.

Although responsible for the first successful Marcellus well in 2004 and currently the second largest leaseholder in the play after Chesapeake Energy, Range only recently has been devoting most of its time and money to the Marcellus. The company divested its Barnett Shale acreage in March to focus on several stacked plays in Pennsylvania (see Shale Daily, March 7; March 2).

That activity is straining midstream capacity, though, the company said.

In the first quarter of the year Range completed 16 wells in southwest Pennsylvania that have not yet been connected to a gathering system. To alleviate that bottleneck, Range completed and is now testing a third expansion of its gas processing facilities and expects to have 200 MMcf/d of additional capacity online in May, bringing its total capacity to 350 MMcf/d.

That would jump to 390 MMcf/d if Range completes an expansion of its Lycoming County gathering system in the third quarter. The expansion will allow Range to tie in 20 more wells.

Looking to manage a bottleneck in southwest Pennsylvania, Range signed two memorandums of understanding to sell its ethane from the region and expects to complete sales agreements in the next year. Ethane is largely stranded in the Marcellus because there is no market in the region and because pipeline operators are nearing their blending capacity (see Shale Daily, March 28).

Across its other Appalachian projects this year, Range plans to drill 50 tight gas sand wells, 15 coalbed methane (CBM) wells and 15 horizontal wells in the Huron Shale, and the Berea and Big Lime formations in Virginia. In the first quarter the company drilled five gross vertical tight gas sand wells and one CBM well in the Nora field in western Virginia.

Although exiting the Barnett, which Range expects to complete at the end of April, Range is still active in the Midcontinent, particularly Oklahoma and the Texas Panhandle, with operations in the Granite Wash, the St. Louis Lime, the Woodford Shale and the Mississippian Lime plays. The company also drilled its first Penn Shale well in the Conger Field of West Texas.

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