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Atlas Reports Record Quarterly Output in Marcellus Shale

Average net production in the Appalachian business unit of Atlas Energy Inc. hit a record 63.3 MMcfe/d in 3Q2010, representing a 53%-plus increase in output year/year and a 15.4% jump from the previous three months, the Pittsburgh-based producer said Wednesday.

Total average net production reached 118.3 MMcfe/d in the latest quarter, which was 18.4% higher than in 3Q2009 and 7.7% higher than in the previous quarter, Atlas said. Most of the output came from the company's Marcellus Shale acreage in southwestern Pennsylvania.

"Our strong operating results and well performance in the third quarter exceeded our earlier estimates and reflect the quality of our acreage, the relatively shallow decline of our wells and the contribution of our new hires and the quality of our senior operating team," said Atlas President Richard D. Weber.

Between July and September Atlas drilled 19 horizontal wells in the Marcellus Shale. Twelve of the wells were fractured and completed, and six of those wells were put into production, Atlas said.

"The average initial peak rate of production from the 12 horizontal Marcellus Shale wells completed in the quarter was 6.8 MMcfe/d and included a well in Westmoreland County [in Pennsylvania] that reached a company-record initial rate of production of 21 MMcf/d.

"This well is a step out from existing infrastructure and is not expected to be turned into line until the second quarter of 2011. Four of the other wells, which were completed but not yet turned into line during the third quarter, will be turned into line during October, while the last well is also waiting on pipeline and will be turned into line in 2011."

Affiliate Atlas Pipeline Partners LP also reported that Laurel Mountain Midstream LLC, a joint venture with Williams Cos., "continues to make excellent progress in the build out of its new expansion gathering system, which is specifically designed for high-volume, high-pressure Marcellus Shale wells." Laurel Mountain Midstream owns 1,800 miles of intrastate gathering lines in the Appalachian Basin that serve 6,900 wells (see Daily GPI, April 2, 2009).

The first phase of the expanded gathering system "is expected to be available to Atlas late in the fourth quarter 2010, while the initial deliveries into the Shamrock station in Fayette County [Pennsylvania] are expected to take place early in the first quarter 2011."

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