With a projected 2018 capital expenditures program of $1.975-2.375 billion and adjusted for asset sales, Chesapeake Energy Corp., Oklahoma City, expects total 2018 production to increase 3% year-over-year and oil volumes to rise 5% compared with 2017 levels.
The company, which reported 2017 full-year and fourth quarter 2017 financial and operational results, expects its Eagle Ford activity to dominate production share in 2018. Down slightly from the 166 wells placed on production in the Eagle Ford in 2017, 140 wells are expected in 2018, where 5 rigs are currently running, the company said.
Chesapeake reported net income of $953 million and net income available to common stockholders of $813 million for 2017. For fourth-quarter 2017, Chesapeake reported net income of $334 million and net income available to common stockholders of $309 million.
Chesapeake’s total capital investments were $2.458 billion during 2017 compared with $1.697 billion in 2016. As of Dec. 31, 2017, Chesapeake’s principal debt balance was $9.981 billion compared with $9.989 billion as of Dec. 31, 2016.
Sales agreements for properties in the Midcontinent, including the company’s Mississippian Lime assets, should close by this year’s second quarter (OGJ Online, Feb. 9, 2018).
Operations update
Chesapeake’s average production for 2017 was 547,800 boe/d, down from the 635,400 boe/d in 2016. Average production for fourth-quarter 2017 was 593,200 boe/d compared with 574,500 boe/d in the same quarter in 2016.
Including production from the 140 wells it expects to place on production in the Eagle Ford in 2018, Chesapeake expects “to deliver production growth, adjusted for asset sales, of 1-5% on reduced capital expenditures,” said Chief Executive Officer Doug Lawler.
In the Powder River basin in December 2017, the LEBAR 15-34-69 A TR 22H well was placed on production in the gas-condensate window of the Turner with a lateral length of 10,100 ft. The well reached a peak rate of 2,600 boe/d (50% oil) and has cumulatively produced 115,000 boe (50% oil) in its first 60 days of production. The LEBAR well is currently producing 2,000 boe/d (45% oil) with a flowing tubing pressure of 2,600 psi after 80 days on production. Chesapeake’s seventh producing well targeting the Turner formation, the BB 35-35-72 USA A TR 21H, was completed with a 9,677-ft lateral and is scheduled to be placed on production in late February.
In January, Chesapeake placed three wells on production from the Sussex formation, averaging 6,895 ft in lateral length, and achieving an average peak rate of 880 boe/d (90% oil). Chesapeake expects to add a fourth rig in April with plans to place on production as many as 33 wells in 2018 compared with 25 wells in 2017.
In the Marcellus shale, Chesapeake is utilizing 1 rig and expects to place on production as many as 55 wells this year compared with 43 wells in 2017. Total gross operated production from the region is expected to remain flat vs. 2017 at 2.1 bcfd.
In the Haynesville shale, Chesapeake is utilizing 3 rigs and expects to place on production as many as 25 wells this year compared with 36 wells in 2017. In December 2017, Chesapeake placed the Nabors 13&12-10-13 1HC well on production from the Bossier formation, its first ever Bossier horizontal well with a lateral length of more than 10,000 ft, which achieved a peak rate of 35.8 MMcfd.
In the Utica shale, Chesapeake is utilizing 2 rigs and expects to place on production as many as 40 wells this year compared with 67 wells in 2017.
In the company’s Midcontinent operating area in Oklahoma, Chesapeake is utilizing 1 rig and expects to place on production as many as 40 wells this year vs. 71 wells in 2017. Chesapeake expects to spud its first horizontal well targeting the Chester formation in Woods County in May and its first horizontal well targeting the Hunton formation in June. If successful, Chesapeake could drill as many as 10 additional Chester and Hunton tests this year.
Contact Mikaila Adams at [email protected].