EQT Corp. on Friday said it expects to produce more natural gas in its core Marcellus Shale acreage on reduced cluster spacing, longer laterals and because of a land acquisition from Chesapeake Energy Corp. including higher projections for estimated ultimate recovery (EUR) at wells in its core Marcellus Shale acreage, thanks to reduced cluster spacing, longer laterals and a pending deal with Chesapeake Energy Corp.
In a presentation for shareholders, the Pittsburgh-based company said it expects wells in southwestern Pennsylvania and northern West Virginia to have estimated ultimate recoveries (EUR) per well of 9.8 Bcfe, while each well drilled in central Pennsylvania would have a EUR rate of 6.6 Bcfe. By comparison, late last year the company’s forecasted EURs ranged per well from 6.4-9.0 Bcf in the play.
EQT said it plans to drill all of its wells in central Pennsylvania and northern West Virginia, the latter a predominantly wet gas area, with reduced cluster spacing, likewise with more than 90% of the wells it drills in southwestern Pennsylvania, a prolific dry gas area. The company said more than 50% of its acreage will utilize reduced cluster spacing. About 35% of EQT’s acreage in the Marcellus is considered wet gas.
In early May EQT agreed to pay $113 million to buy acreage in the Appalachian Basin from Chesapeake, which would give it about 560,000 net acres with proved, probable and possible (3P) reserves of 15.7 Tcfe and 21 Tcfe of resource potential (see NGI, May 6). The agreement with Chesapeake, expected to close by the end of this month, is for a total of 99,000 net acres, including 67,000 prospective for the Marcellus, 32,000 for the Utica Shale.
EQT said it has identified 1,080 drilling locations on its 95,000 acres in southwestern Pennsylvania, and had 109 wells in production at the end of March. It plans to bring 56 more wells online this year. Wells are being drilled on 87-acre spacing at a cost of $6.5 million per well. EUR is averaging 2,050 Mcfe per lateral foot. In northern West Virginia, EQT said it has 1,065 drilling locations identified on 90,000 acres, and had 86 wells in production as of March 31. The company said it planned to bring 84 more wells online in 2013. Wells are being drilled on 83-acre spacing at a cost of $6.6 million per well. EUR is averaging 2,035 Mcfe per lateral foot.
EQT holds 80,000 acres in central Pennsylvania, and has identified 727 drilling locations there. The company had 31 wells online in the region as of March 31, and plans to bring 17 more into production by the end of the year. Wells are being drilled on a 110-acre spacing at a cost of $6.6 million per well. EUR is averaging 1,375 Mcfe per lateral foot. EQT said it was also in the early stages of acreage delineation in central Pennsylvania.
Across all three core development areas in the Marcellus, EQT said it plans to drill using 4,800-foot laterals. By comparison, late last year the company said wells would be drilled with an average lateral length of 4,500 feet.
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