Already considered the leader of the pack in the Marcellus Shale, Range Resources Corp. padded its lead in the play during 1Q2014 with record-setting production from one super-rich well in southwestern Pennsylvania and decreasing well costs.
Earlier this year, Range said it planned to spend more on a strategy aimed at growing reserves and doubling production every four years (see Shale Daily, Feb. 26). Range's Marcellus strategy, begun when the company brought the play's first horizontal well online in 2005, continues to pay off, CEO Jeff Ventura said during a conference call with analysts Tuesday.
"Range is continuing to successfully execute its plan and we're currently on track to grow our production volumes at 20-25% for this year and beyond," Ventura said.
"It's fun to announce that we drilled our best Marcellus well ever, and what we believe is the best Marcellus well ever drilled by the industry, in the southwest portion of the play. The well tested at a 24-hour rate of 6,357 boe/d, or 38.1 Mcfe/d, from a 7,065-foot lateral with 36 stages in the Marcellus. Our team continues to demonstrate its ability to consistently improve and raise the bar. This speaks both to the quality of our acreage and also to the quality of our team.
In December, Range’s Marcellus production reached 1 Bcfe/d (see Shale Daily, Dec. 17, 2013). Range has said it plans to increase the lateral lengths on wells in southwest Pennsylvania to between 4,200 and 5,300 feet and increase the number of frack stages to 23-25.
Range's overall production volumes reached a record high in 1Q2014, averaging 1.06 Bcf/d, a 21% increase compared with the prior-year quarter, while unit costs declined 6% over the same period, the company said. The production increase came despite harsh winter weather that held down production.
The southern Marcellus Shale division averaged 800 (672 net) MMcfe/d in 1Q2014, a 34% increase over 1Q2013. The division's production included 358 MMcf/d of natural gas, 44,141 b/d of natural gas liquids (NGL) and 8,224 b/d of condensate. Range brought 13 wells online in southwest Pennsylvania during the quarter, with four wells in the super-rich area, eight wells in the wet area and one in the dry area. The initial production rates of the division's new wells average 16.8 (13.7 net) MMcfe/d with 59% liquids, with an average lateral length of 4,300 feet. Range is currently bringing on three dry gas wells in eastern Washington County drilled with average lateral lengths of 4,768 feet and completed with 25 frack stages. The wells, which are currently online and cleaning up, "appear capable of over 20 MMcf//d when the full facilities are in place," the company said.
And the Utica Shale under Range's acreage in Washington County, PA, could become a larger slice of the company's production pie, Waller said.
"Based on our mapping and seismic, we believe that we may have the dry core of the Utica play in that area. That's based on well control and seismic control, not only in Ohio and West Virginia, but in Washington County, PA. Typically in any play, the dry core is the area with the most prolific wells." A recently spudded Utica test well should provide results before the end of the year, Waller said.
That stands in contrast to the announcement Tuesday by BP plc that it will not proceed with development of its Utica Shale acreage in Ohio due to disappointing results there (see related story).
At the end of 1Q2014, the division was operating nine rigs comprised of three air rigs and six horizontal rigs. Due to drilling efficiencies and the pace of planned activity for the remainder of the year, the company expects to reduce those numbers to three air rigs and three horizontal rigs by the end of the year, but officials said they expect more rigs on average in 2015. Range expects to turn to sales a total of 115 wells in the southern Marcellus during the remainder of 2014.
Range's northern Marcellus Shale division reported production of 232 (195 net) MMcfe/d in 1Q2014, a 10% increase compared with 1Q2013, with three wells drilled during the quarter and one well turned to sales. The backlog of wells in northeast Pennsylvania waiting on pipeline connection increased to nine by the end of March, and the company had one drilling rig operating at that time.
In the Midcontinent, production average 84.5 net MMcfe/d, an 11% increase over the prior year period, and included 51.2 MMcf/d of natural gas, 3,395 b/d of NGL and 2,160 b/d of oil. The Midcontinent division continued to focus on Range's horizontal Mississippian Chat acreage along the Nemaha Ridge in Oklahoma.
"The Midcontinent team also set a new record by drilling our highest oil-rate Mississippian Chat well to date," Ventura said. That Oklahoma well came on 1,263 boe/d, with an oil-only rate of 1,062 b/d, he said.
Range reported net income of $33 million for 1Q2014, compared to a net loss of $76 million in 1Q2013. The company said it expects average daily production of 1.065-1.075 Bcf/d in 2Q2014; 1.160-1.210 Bcf/d in 3Q2014; and 1.280-1.340 Bcf/d in 4Q2014, with 30-35% liquids.