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Cold Weather Delays Some Magnum Appalachian Production

Magnum Hunter Resources Corp. said it was encouraged by early well results in the Appalachian Basin, where it continues to focus on accelerating drilling. Inclement weather, coupled with heavy liquids volume and a bevy of infrastructure activity in the region has delayed midstream construction in Ohio and West Virginia.

The company boosted its position in both states to 180,000 net acres apiece, recently adding 89,000 gross acres in the Marcellus and another 105,000 in the Utica.

"Our newly completed wells in the Marcellus continue to improve both in overall gas production volumes and liquids recovery," said CEO Gary C. Evans. "We are very anxious to test our two new Utica wells recently drilled in Ohio, which are currently in the process of completing."

Evans added that the company’s 2014 capital expenditure budget (seeShale Daily, Dec. 12) in the Marcellus and the Utica will provide for "maximum throughput capabilities" on its midstream system.

Magnum said on Friday, however, that although subsidiary Eureka Hunter Pipeline is working quickly to update, install and tie gathering lines into its wet gas pipeline system in Tyler and Wetzel counties, WV, cold weather in the region has caused "significant liquids fallout," resulting in high pipeline pressure and liquids handling issues that have delayed production at some of its Marcellus wells in southeast Ohio. Magnum said it is working to address these issues with the projects expected to be finished early next year.

The company provided an update on four wells it has now completed on the Ormet Pad in Monroe County, OH. Combined, these wells tested at a rate of 11.65 MMcf/d and 1,788 b/d of condensate. On the Collins Pad in Tyler County, WV, Magnum said two wells have tested at 19.85 MMcf/d and 942 b/d of condensate. The other two wells at the Collins are awaiting test equipment.

Wunderlich Securities financial analyst Irene Haas called the newly tested Magnum wells “monsters,” saying they could meaningfully boost Magnum’s production profile. She also said  the company’s infrastructure delays shouldn’t impact its operations significantly.

At its Stalder Pad, designed to handle 10 Marcellus and eight Utica wells, in Monroe County, OH, Magnum said fracture stimulation operations will begin on one Utica well there next week, with a test expected sometime in January. The first Marcellus well drilled on the Stalder is awaiting completion operations.

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