Shale Daily / NGI All News Access

Chief Hits Magic Mark in Marcellus

Chief Oil & Gas LLC, which in 2005 was the second largest natural gas producer in the Barnett Shale, is showing it can do the same in the Marcellus Shale, reporting that output in Pennsylvania has reached the 100 MMcfe/d mark from 42 wells.

The private Dallas operator, which now holds more than 600,000 gross acres in Pennsylvania, West Virginia and Maryland, is forecasting that its exit rate this year from the Marcellus play will be 115 MMcfe/d.

Wells have been drilled and completed in Lycoming, Bradford, Susquehanna, Wyoming, Clearfield, Blair, Somerset, Greene and Fayette counties, PA, and in Marshall County, WV.

"Each of these areas has proved to be highly successful with EURs [estimated ultimate recoveries] ranging from 3.75 Bcf to 7 Bcf, varying by county, Marcellus thickness and lateral length," said COO Michael Radler.

Ninety-three wells have been drilled to date in the Pennsylvania and West Virginia portions of the play, according to Chief. Of those drilled, 15 are awaiting a pipeline hook-up and 36 need to be completed. Seven rigs are expected to be drilling at year's end, up from three at the start of 2010. Twenty wells are being drilled or remain to be drilled this year.

Recent wells placed on line have averaged 4.7-8 MMcf/d from an average 2,568-foot lateral in northeastern Pennsylvania, where cumulative output has exceeded 1 Bcf from each of three multi-well pads in two counties, Chief said. In central Pennsylvania, two recently completed wells averaged 4.9 MMcf/d (4,864-foot laterals) and 5.3 MMcf/d (4,143-foot laterals).

The most recent well placed on production had a lateral length of 4,994 feet and a production rate of more than 15 MMcf/d on choke.

"Our experienced shale team has done an excellent job with drilling and completion designs and our results in all areas of the Marcellus Shale continue to be impressive," said Radler.

Chief, founded by Trevor D. Rees-Jones, drilled its first well in the Barnett Shale in 1997 and by 2005 it was the second largest producer there after Devon Energy Corp. with more than 250 wells on 200,000 leasehold acres. By 2005 it was producing more than 100 MMcf/d.

In 2006 Rees-Jones sold the Barnett midstream business and most of the leasehold. The leasehold assets went to Devon for $2.2 billion, and Crosstex Energy LP bought the gas gathering system for $480 million (see Daily GPI, June 30, 2006).

Chief maintained a small position in the Barnett and then began to expand into prospective fields in Appalachia and central Utah (see Daily GPI, Aug. 21, 2009).

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