The Daily Digger is dedicated to being your one-stop location to find all of the latest news and updates on the activity in the nationwide shale play, as well as relevant updates regarding the energy industry in general.
Rice Energy Finds Dry Gas Success in the Utica Shale
Rice reported continued drilling success in the dry gas Utica play.
Two new wells are performing in line with the first well, the Bigfoot 9H. The Bigfoot is outperforming initial expectations.
The company provided a type curve for the play.
Firm transportation remains a critical component of the growth plan, with FT costs making a big dent in drilling returns.
Two New Wells Confirm Success In The Utica's Dry Gas Window
Rice Energy (NYSE:RICE) provided a performance update for its first operated dry gas Utica well located in Belmont County, Ohio, the Bigfoot 9H. As a reminder, the well tested in June of this year with an initial rate of ~42 MMcf/d from a ~7,000-foot lateral with 40 frac stages and was placed into sales during the second quarter.
The Bigfoot's performance is beating initial expectations. The well has been producing on a restricted choke program for five months at a flat rate of ~14 MMcfe/d. To date, the Bigfoot has cumulatively produced approximately 2.0 Bcfe and continues to flow at 14 MMcfe/d. Most importantly, the well's average pressure decline has been approximately 11 psi/d, which is better than the initial 12.5 psi/d "High Case" model and may indicate a higher production trajectory over time (slide below). Rice's updated High Case for the well suggests cumulative production from the well over the first 18 months online of ~7.3 Bcf. This would put the well at par with some of the best wells drilled in the Marcellus dry gas sweet spot in Susquehanna County of Pennsylvania.
Due to investor pressure, the U.S shale drillers are being pushed to improve financial and operational performance after a few years of poor returns. Even though the industry has improved its numbers, when compared to last year, investors still want more to be done for them to earn more money. That's why two mid-tier shale drillers, Cabot and Climarex, have decided to merge in order to eliminate $100 million in annual costs, which means more money for the investors. This all-stock transaction is valued at about $7.4 billion, which is relatively high for the oil and gas sector. The new entity will be renamed and the headquarters located in Houston, Texas. Cabot shareholders will own 49.5 percent of the new entity, and Climarex the rest. The Cimarex-Cabot merger will address the investor's demand for a higher amount of returning cash. The initial plan is to pay a 50-cent-per-share special dividend on closing the deal while offering a quarterly variable div
From Energy in Depth: There is something very strange going on along Carter Road, in Dimock, Pennsylvania, and I’m not speaking of natural gas, methane migration, contamination, litigation or even the extensive water testing there by the EPA and others. No, I’m talking about a new “Watergate” conspiracy, complete with 18 minutes of missing tape (well, video, actually). It seems the ever-present Green Party member and naturist Vera Scroggins (a/k/a Vera Duerga ) has posted a video of Craig Sautner meeting with the EPA. Mysteriously, the video is but 14 seconds in length, cutting off conversation in what is obviously mid-stream. It raises a question Craig Sautner, like Ronald Reagan in Kings Row , might have asked, “Where’s the rest of me?’ Carter Road, isn’t Kings Row, of course, (at least not until you arrive at the mansion Scott Ely, one of the Dimock litigants, is building with his royalty money ), but there appears to be a whole lot of film editing going on there to fi
According to the world's largest oil traders, global oil demand is set for a rebound. Between now and the end of 2022, global consumption is expected to increase by up to 8 million barrels each day. Vitol Group, the world's largest oil trader, supports this statement. In an interview with Bloomberg, Vitol's chief executive Russell Hardy said, "We'll need all eight cylinders to get through 2022". This, of course, is due to the lower than average demand for oil at the moment. Reopening economies and Asian markets will create a strong demand rebound by the end of this year and in 2022. Although the demand for jet fuel will slowly increase, it will still be below average at the end of the year. Nevertheless, a surge in petrochemicals will offset the expected delay in jet fuel demand. Last year, the oil surplus reached a record of 1 billion barrels. This excess is already more than halfway drained, and experts believe it will be depleted by the third quarter th