Atlas Energy gears up Pennsylvania Marcellus

Atlas Energy Resources is the largest producer of gas from Devonian Marcellus shale and has drilled more than 80 wells, almost all of them vertical, the company said in a webcast Oct. 8.

By OGJ editors
HOUSTON, Oct. 8 -- Atlas Energy Resources LLC, Philadelphia, is the largest producer of gas from Devonian Marcellus shale and has drilled more than 80 wells, almost all of them vertical, the company said in a webcast Oct. 8.

A sweet spot in the emerging play occurs in the same area as the company's gas gathering system, and Atlas Energy is moving 60 MMcfd. The company is expanding the system's capacity to 150 MMcfd by the end of 2008 and 250 MMcfd by the end of 2009 from the present 120 MMcfd.

Atlas Energy previously said it could ultimately recover 4 to 6 tcf of gas from the Marcellus on its properties mostly in southwestern Pennsylvania (OGJ, Mar. 3, 2008, p. 40).

The play falls in the midst of Atlas Energy's historic acreage position. It controls 580,000 acres, including 280,000 acres in a sweet spot in the play in southwestern Pennsylvania.

The initial 24-hr flow rate has averaged 1 MMcfd, and the company assigned average reserves of 1 bcf/well. Initial flows have ranged from 300 Mcfd to 3.6 MMcfd.

Atlas Energy, which claims to be advanced in its understanding of the Marcellus reservoir, said it has lately eliminated many of the low-end wells. It expects the play to be developed with horizontal wells and has drilled one horizontal penetration which was a success although costs were unacceptable.

The company plans to drill four horizontal wells this fall in a 50-50 joint venture in Washington County, Pa., offsetting acreage held by Range Resources Corp., Fort Worth. The Marcellus in this area is lower pressured and less geologically complex than in the areas Atlas Energy has drilled thus far.

The company plans to have 150 vertical wells on production by mid-2009 and by then expects to be able to assess whether to begin a bias toward horizontal wells. It does not believe the Marcellus play will be productive continuously across its entire extent (see map, OGJ, Oct. 6, 2008, p. 50).

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