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Rex Calls Upper Devonian Test 'Encouraging'

September 22, 2011
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Rex Energy Corp. said results from its first test well into the Upper Devonian/Burkett Shale just north of Pittsburgh are encouraging enough to justify additional wells into the formation directly above the Marcellus Shale in the coming year.

The State College, PA-based company drilled the Gilliland No. 11-HB well in Butler County, and said the well produced at an average rate of around 3 MMcfe/d over five days. Rex described the natural gas from the Upper Devonian/Burkett well as being "similar in composition" to that produced from nearby Marcellus wells and said it plans to place the well into service in the fourth quarter.

Gilliland No. 11-HB is on a six-well pad that is otherwise targeting the Marcellus, but it produced at a lower rate than nearby Rex wells into the Marcellus. The company reported an average five-day flow rate of 6.6 MMcfe/d for a three-well pad near the Gilliland No. 11-HB well.

Marcellus operators are increasingly studying ways to jointly develop other formations. While the Utica Shale, directly below the Marcellus, is getting most of the attention because of its significant liquid potential, the Upper Devonian Shale directly above the Marcellus is also a contender for development (see Shale Daily, March 7).

After releasing results from two Upper Devonian/Geneseo Shale wells in northwestern Pennsylvania, National Fuel Gas Co. subsidiary Seneca Resources said the formation probably could not be developed economically on its own at current prices, but could potentially be bundled into Marcellus operations (see Shale Daily, Sept. 15).

The Seneca wells are around 100 to 150 miles northwest of the Rex well. Mt. Jewett, a 5,095-foot vertical well near the border of Elk and McKean counties, only collected information about rock quality. DCNR 001, a 5,830-foot horizontal well in Potter County, flowed at a seven-day initial production (IP) rate of 2 MMcf/d, peaking at 2.9 MMcf/d. By comparison, a Marcellus well that Seneca drilled nearby tested at an IP rate of 4 MMcf/d.

Rex is currently hydraulically fracturing its first Utica test well, the Cheeseman No. 1, also in Butler County, and expects to have results ready by the time it releases its third quarter earnings within the coming weeks.

Because Butler County, just north of Pittsburgh's Allegheny County, is believed to be in the heart of the wet gas window of the Utica, it is drawing increased attention from operators. The Pennsylvania Department of Environmental Protection issued 95 drilling permits for shale wells in the county through the end of August, compared to 50 at the same point last year. In addition to Rex, Phillips Exploration Inc. and XTO Energy Inc. also hold permits in Butler County.

According to company reports and NGI Shale Daily calculations, Rex currently has 63,100 net acres combined in the Marcellus/Upper Devonian shales, 46,900 acres in the Pennsylvania Utica, 39,000 acres in the Niobrara and 11,000 acres in the Ohio Utica.

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