After its record-shattering Utica Shale test in Southwest Pennsylvania, EQT Corp. plans to phase-out its Upper Devonian drilling program in the state and redirect that capital to the Utica.
The company said earlier this month its Scotts Run well in Greene County, PA, tested at a 24-hour rate of 72.9 MMcf/d with an average flowing wellhead pressure of 8,641 psi (see Shale Daily, July 23). The Utica well was the company’s first in Pennsylvania. It was completed with 18 fracture stages on a 3,221 foot lateral, bringing the initial production rate to 22.6 MMcf/d per 1,000 feet of lateral. Following the deliverability test, EQT said Scotts Run produced an average of 27 MMcf/d on restricted choke during a seven-day period.
“Given the extraordinary initial results of our first dry Utica well, we are accelerating our efforts in Greene County,” said EQT’s Steven Schlotterbeck, president of Exploration and Production. “Our focus is on creating a capital-efficient, dry Utica development plan that leverages existing pads, existing gathering infrastructure and takeaway capacity. Consequently, we have reevaluated our competing investment opportunities and made a strategic decision to phase-out our Upper Devonian drilling program.”
A group of shallower shales above the Marcellus, the Upper Devonian remains a question mark, especially when compared to the proven success of the Marcellus and Utica (see Shale Daily, June 29; April 28, 2014). With limited production data and development that’s been delayed in favor of its older cousins, some operators have been reluctant to say if the formation is analogous to the Appalachian Basin’s leading source rocks. For the most part, Upper Devonian wells have been planned as piggybacks off multi-well Marcellus pads, with many slated to be completed in the future.
EQT spokeswoman Linda Robertson said the company plans to drill 24 total Upper Devonian wells this year. While none of the wells drilled this year has been completed, she said the company expects to turn them inline before phasing out the Upper Devonian program beginning next year.
EQT currently has 36 Upper Devonian wells online, according to the latest investor presentation, which shows they have cost $5.9 million each on average. But the Utica’s possibility in Southwest Pennsylvania appears more appealing to EQT, which said it would work closely with its midstream affiliate EQT Midstream Partners to design necessary expansions to handle the steep volumes on its Jupiter gathering and Equitrans transmission systems. In addition to the successful Utica test, Robertson said the Upper Devonian program was being phased out “due to low returns.”
EQT plans to drill a second Utica well in Greene County by the end of September, which would be 13,400 feet deep with up to a 4,500 foot lateral. Like the first well there, it would be drilled off an existing Marcellus Shale pad. It plans to drill another Utica well in Wetzel County, WV, this quarter to a depth of 12,700 feet with up to a 3,500 foot lateral.
The Scotts Run well cost about $30 million, more than twice as much as average wells in Appalachia. Schlotterbeck said costs were higher with longer rig and completion times. Going forward, the company expects to drill similar deep Utica wells in the state at for $12.5-14.5 million each.
“I would expect our next well would be substantially less expensive than this first well,” Schlotterbeck said. “But it’s probably going to take several wells for us to approach that $12.5 million number.”
Recent results from other operators in the area also confirm the early potential of the Utica in Southwest Pennsylvania. In December, Range Resources Corp. tested its first Utica well in Washington County at 59 MMcf/d (see Shale Daily, Dec. 15, 2014). Last week, Consol Energy Inc. said its first Utica well n Westmoreland County cost about $27 million and tested at a peak 24-hour rate of more than 61 MMcf/d (see Shale Daily, July 29).
Scotts Run is currently shut in for the installation of production facilities. After those operations are complete, EQT plans to flow the well on restricted choke at 25-30 MMcf/d.
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