"Given this potential for lower long term gas prices, we do not think it prudent to invest much money in wells whose all-in, after tax returns exceed our investment hurdle rates by only a relatively small amount," said David L. Porges, EQT's chairman, president, and CEO during an earnings call Thursday. "As a result, we are suspending drilling in those areas such as central Pennsylvania and our Upper Devonian play that are outside that core."
EQT owns acreage as far south as central West Virginia and as far east as northeastern Pennsylvania near Scranton, but the core of its drilling operations has focused on southwestern Pennsylvania in Greene, Washington, and Westmoreland counties. That core will become even more focused to the Utica, a shale layer below the Marcellus.
"There have been fewer than 10 wells drilled and completed in the deep Utica around our acreage, so it is still too early to say that the play will be economic," Porges said. "But the early results are certainly encouraging. Specifically, if the Utica does work, which for us means that the returns are better than the returns from the core Marcellus, we will certainly add significant resource potential to our inventory."
Porges wasn't specific about which Utica wells would be the focus of future natural gas drilling, saying that more specific guidance will emerge from the company in December.Read more by clicking here.
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