EQT Corp. released updated information for its investors on Friday, including higher projections for estimated ultimate recovery (EUR) at wells in its core Marcellus Shale acreage, thanks to reduced cluster spacing, longer laterals and a pending deal with Chesapeake Energy Corp.
In a 41-slide presentation, the Pittsburgh-based company said it expects wells in southwestern Pennsylvania and northern West Virginia to have EURs of 9.8 Bcfe/well, while wells drilled in central Pennsylvania will have a EUR rate of 6.6 Bcfe/well. By comparison, late last year the company released EUR estimates ranging from 6.4-9.0 Bcf/well in the Marcellus (see Shale Daily, Dec. 6, 2012).
EQT said it plans to drill all of its wells in central Pennsylvania and northern West Virginia, the latter a predominantly wet gas area, with reduced cluster spacing, likewise with more than 90% of the wells it drills in southwestern Pennsylvania, a prolific dry gas area. The company said more than 50% of its acreage will utilize reduced cluster spacing. About 35% of EQT's acreage in the Marcellus is considered wet gas.
With a deal waiting in the wings to purchase 25,000 acres from Chesapeake (see Shale Daily, May 6), EQT said it will soon hold 560,000 acres in the Marcellus, with proved, probable and possible (3P) reserves of 15.7 Tcfe and 21.0 Tcfe of resource potential. The company also said it plans to bring 157 wells online in 2013: 84 in northern West Virginia, 56 in southwestern Pennsylvania and 17 in central Pennsylvania.
EQT said it has identified 1,080 drilling locations on its 95,000 acres in southwestern Pennsylvania, and had 109 wells in production as of March 31. It plans to bring 56 more wells online in 2013. Wells are being drilled on 87-acre spacing at a cost of $6.5 million per well. EUR is averaging 2,050 Mcfe per lateral foot.
In northern West Virginia, EQT said it has 1,065 drilling locations identified on 90,000 acres, and had 86 wells in production as of March 31. The company said it planned to bring 84 more wells online in 2013. Wells are being drilled on 83-acre spacing at a cost of $6.6 million per well. EUR is averaging 2,035 Mcfe per lateral foot.
EQT holds 80,000 acres in central Pennsylvania, and has identified 727 drilling locations there. The company had 31 wells online in the region as of March 31, and plans to bring 17 more into production by the end of the year. Wells are being drilled on a 110-acre spacing at a cost of $6.6 million per well. EUR is averaging 1,375 Mcfe per lateral foot. EQT said it was also in the early stages of acreage delineation in central Pennsylvania.
Across all three core development areas in the Marcellus, EQT said it plans to drill using 4,800-foot laterals. By comparison, late last year the company said wells would be drilled with an average lateral length of 4,500 feet.
The company also touted average 30-day initial production (IP) rates for several wells across its core areas of the Marcellus, the highest of which were in Southwestern Pennsylvania. There, in Greene County, 10 wells on the Tharpe pad recorded an average 30-day IP of 17,950 Mcfe, while seven wells on the Scotts Run pad hit an average 30-day IP of 15,696 Mcfe. In neighboring Washington County, two wells on the Kevech pad recorded an average 30-day IP of 10,112 Mcfe.
In Northern West Virginia, EQT said the six wells on its Big 176 pad in Wetzel County achieved an average 30-day IP of 8,103 Mcfe, while five wells on its PEN 15 pad in Doddridge County recorded an average 30-day IP of 9,317 Mcfe. Meanwhile, in Central Pennsylvania, the company said its Rosborough well in Armstrong County had an average 30-day IP of 6,489 Mcfe, while two wells on its Frano pad in Jefferson County recorded an average 30-day IP of 7,970 Mcfe.
EQT said it expects to close on an agreement to purchase 99,000 net acres (67,000 prospective for the Marcellus, 32,000 for the Utica Shale) from Chesapeake sometime during 2Q2013. The deal, which is valued at $113 million, includes 25,000 acres in EQT's southwestern Pennsylvania area of operations, in Allegheny, Greene and Washington counties.
The Chesapeake deal also includes 10 horizontal wells in Washington County, three of which are online, with the remaining seven expected to be online by the end of 2013. Collectively, the 10 wells have an EUR of 54 Bcfe.