Shale Daily / NGI All News Access

Magnum Hunter Ramps Up in West Virginia

The first well drilled by Magnum Hunter Resources Corp. into the northwestern West Virginia portion of the Marcellus Shale tested at an initial production (IP) rate of 7.0 MMcfe/d and was producing as of Dec. 22 into the recently completed Eureka Hunter Pipeline system, the company said.

The Weese Hunter No. 1001 in Tyler County was spud in late July by subsidiary Alpha Hunter Drilling and reached total measured depth of 10,388 feet in mid September. A 12-stage hydraulic fracture job was completed in December, and the IP rate was achieved with flowing tubing pressures of 2,350/square inch on a 22/64-inch choke. The BTU content of the well was measured at about 1,225.

According to the Houston-based producer, the economic ultimate recovery for the Weese Hunter well is currently estimated to be about 4 Bcfe. Subsidiary Triad Hunter LLC is the operator and owns a 100% working interest and an 84.3% net revenue interest.

Triad President James W. Denny said the well was producing at the "high end" of the company's original expectations.

"The downhole well log characteristics of our next two horizontal wells that have been drilled and are waiting on fracture stimulation have indicated similar characteristics," he said. "Since none of our new Marcellus Shale horizontal drilling locations on our existing acreage position are currently booked as proved reserves, the anticipated reserve additions from these recent activities should add significant value in the future to our shareholders."

Magnum Hunter and its subsidiaries have a leasehold of about 50,000 net acres in northwestern West Virginia and southeastern Ohio.

"We have currently budgeted a minimum of 12 for drilling in fiscal year 2011 for this region," said Denny. "Additionally, the high BTU nature of the production from this portion of the Marcellus Shale in our area of operations will allow us to maximize the liquids rich nature of this gas stream because of our midstream commitments in gathering, transmission and processing."

The first six miles of the company's 20-inch diameter Eureka Hunter Pipeline system were purged on Dec. 22 and turned to sales into Dominion Transmission's TL-265 line. In September Magnum Hunter and DCP Midstream Partners LP created Eureka Hunter Pipeline LLC as a gas gathering joint venture to construct, own and operate gathering assets to serve gas producers in western West Virginia and eastern Ohio (see Daily GPI, Sept. 20).

The second and third phases of the system are expected to be built beginning in early 2011. When operational, Magnum Hunter said the recently ordered 200 MMcf/d cryogenic natural gas processing plant allow the company as well as third-party operators to process natural gas liquids.

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