Chesapeake bolsters Marcellus shale position
Chesapeake Energy Corp., Oklahoma City, said it expects to become the largest gross producer of natural gas from the Appalachian basin Marcellus shale play by the end of 2009.
By OGJ editors
HOUSTON, July 31 – Chesapeake Energy Corp., Oklahoma City, said it expects to become the largest gross producer of natural gas from the Appalachian basin Marcellus shale play by the end of 2009.
The yearend 2009 production figures are estimated to be 80 MMcfe/d net and 200 MMcfe/d gross operated. Yearend 2010 estimates are 200 MMcfe/d net and 500 MMcfe/d gross operated.
With current average production of 30 MMcfe/d net and 50 MMcfe/d gross operated, the company is the play’s largest driller with 15 operated rigs. Chesapeake has enlarged its leasehold by 150,000 net acres to 1.45 million net acres in the quarter ended June 30.
The company has drilled and completed 25 company-operated Marcellus horizontal wells since Jan. 1, 2008, and to date production rates and estimated ultimate recoveries have exceeded expectations while decline rates have been shallower than expected. Chesapeake hiked its targeted average EUR in the Marcellus to 4.2 bcfe/horizontal well from 3.75.
Chesapeake plans to operate 19 rigs in the last half of 2009 and average 28 rigs in 2010 to drill 60 and 165 net wells, respectively.
StatoilHydro, Chesapeake’s partner in the Marcellus play, holds a further 625,000 net acres. StatoilHydro will pay 75% of Chesapeake’s Marcellus drilling costs in the second half of 2009 and in 2010, or $200 million and $550 million, respectively. It paid $39 million of Chesapeake’s second quarter drilling costs.
Chesapeake said it has recouped 91% of its $1.3 billion in Marcellus leasehold investment to date by selling a 32.5% interest in its leasehold to StatoilHydro.
Notable second quarter completions with 30-day average rates are Vargson-1H, in Bradford County, Pa., 4.6 MMcfe/d, Evanchick-2H in Bradford County, 5.3 MMcfe/d, and Messenger-3H, in Wetzel County, WV, 3.4 MMcfe/d.