Chesapeake Energy, Rice Energy, and Others Report 2015 1st Quarter Results
Utica Shale (Eastern Ohio): Utica net production averaged approximately 110 mboe per day (190 gross operated mboe per day) during the 2015 first quarter, an increase of 10% sequentially. The full-year 2014 average completed well cost was $7.2 million with an average completed lateral length of 6,200 feet and 29 frac stages, compared to an average completed well cost of $6.7 million in 2013 with an average completed lateral length of 5,150 feet and 17 frac stages. Chesapeake anticipates average completed well costs of $8.2 million in 2015 while extending laterals to 7,900 feet with 41 frac stages. The average peak production rate of the 38 wells that commenced first production in the Utica during the 2015 first quarter was approximately 1,272 boe per day.Read the entire press release by clicking here. Click here to read Chesapeake's earnings call transcript.
MarkWest Energy Partners:
- In February, Ohio Condensate Company, L.L.C., an entity owned by MarkWest Utica EMG Condensate, L.L.C. (MarkWest Utica EMG Condensate) and Summit Midstream Partners, LLC, announced the commencement of its condensate stabilization facility in Harrison County, Ohio. MarkWest Utica EMG Condensate is owned by the Partnership and The Energy & Minerals Group (EMG). The new facility consists of 23,000 barrels per day (Bbl/d) of condensate stabilization capacity and is fully integrated with a storage and logistics terminal.
- Today, MarkWest Utica EMG, a joint venture between the Partnership and EMG, is announcing the execution of definitive agreements with Rice Energy (NYSE: RICE) to support the development of their acreage in eastern Ohio.Click here to read the entire press release. Click here to read the earnings call transcript. Click here to view the conference call presentation.
During the first quarter of 2015, Eclipse Resources commenced drilling 4 gross (3.8 net) operated Utica Shale wells, completed 2 gross (0.9 net) operated Utica Shale wells and turned to sales 11 gross (8.5 net) operated wells. All of the operated wells turned to sales in the first quarter of 2015 were located in the rich gas and condensate areas of the Company’s Utica Shale acreage. Included in the wells spud during the first quarter of 2015 was the three-well Sawyers pad, Eclipse Resources’ first dry gas spacing test with inter-lateral spacing of approximately 730 feet. Eclipse Resources also has participated in the drilling of 6 gross (1.0 net) non-operated Utica Shale wells and completions on 16 gross (2.8 net) non-operated Utica Shale wells during the first quarter of 2015. Additionally, the Company owned interests in 9 gross (2.6 net) wells that were turned to sales during the first quarter.
Commenting on the production results, Benjamin W. Hulburt, Eclipse Resources’ Chairman, President and CEO, said, “Despite operating in an unusually harsh winter season in which we saw frequent mid-stream related production interruptions, we were able to significantly grow our production as planned. I am extremely proud of the continued efficient and methodical execution of our team. We have moved our drilling activity into the dry gas area of our Utica Shale acreage, where the deeper formation and higher reservoir pressures bring added complexity. Despite this increased complexity, our team continues to efficiently execute on our plan. We recently finished drilling our three-well Sawyers pad, averaging just 18 days from spud to total depth (TD). We have commenced completion activities on this pad, which is our first inter-well spacing test on our Utica dry gas acreage, where we drilled the wells at approximately 730 feet between wells versus our historical spacing of 1,000 feet between wells. We are excited to see how these wells perform as we turn them to sales early in the third quarter of 2015 as this tighter well spacing could potentially increase our well location count by approximately 20%. I am also pleased with the continued performance of our team in reducing costs. We estimate that expected well costs have dropped over 20% since our IPO driven by both efficiency gains and service cost improvements. I am also pleased to report that we recently executed an agreement which we expect will lock in a cost savings of approximately 50% over the previous year for fracture pumping services through the end of 2016. We will continue to look for opportunities to lock in lower service costs as we operate in the current environment.”Read the whole press release by clicking here.
Oil and gas production increased 66% for the three months ended March 31, 2015 to ~14.7 Bcfe (~2.5 million Boe) or an average of ~163.6 MMcfe (~27,261 Boe) per day (74% natural gas, 13% oil and 13% NGLs), compared with production of ~8.9 Bcfe (~1.5 million Boe) or an average of ~98.6 MMcfe (~16,433 Boe) per day (56% natural gas, 29% oil and 15% NGLs) for the three months ended March 31, 2014. The increase in production was attributable primarily to the Company's expanded 2014 drilling program in its core areas of operations and production results from the Marcellus and Utica Shale plays.
Magnum Hunter reported a decrease in oil and gas revenues of 35% to $49.4 million for the three months ended March 31, 2015, compared with $76.0 million for the three months ended March 31, 2014. Revenues decreased during the quarter ended March 31, 2015 due primarily to decreases in the prices received for oil, natural gas and NGLs, partially offset by higher production volumes from our Marcellus Shale and Utica Shale wells.Read the whole release here.
Moving to slide eight, we are presenting our updated economics and type curves for our Warrior North prospect in the Ohio Utica. We also started increasing our sand concentrations in Warrior North at our Jenkins pad in the third quarter of 2014. At this pad, we averaged approximately 2,000 pounds per foot on the completions. Based on the well performance seen to date, after approximately 220 days of production, we are seeing many of the same production characteristics we had observed in our Butler Operated Area, a combination of increased initial rate coupled with a shallower initial production decline.
This area has also has the opportunity to increase lateral lengths in future drilling, so we take these up to 6,500 feet, which also takes the EURs up as well. We now feel that these wells in Warrior North will have IRRs in the 21% to 25% range in the current pricing environment with significant bias to the upside with oil and liquids pricing improvement.Read the whole Rex Energy earnings call transcript by clicking here.
We turned to sales 2 gross (1 net) horizontal Utica wells during the first quarter with an average lateral length of 8,879 feet and a 56% working interest. These wells are currently producing at a managed choke rate of 18 MMcf/d with flowing casing pressures of approximately 6,000 psi per well. As of March 31, 2015, we had 57,000 net acres in southeast Ohio, concentrated in Belmont County.
Our first well, the Bigfoot 9H has cumulatively produced 4.6 Bcf after 315 days online and continues to produce at a managed choke rate of 16 MMcf/d.
The Blue Thunder 10H and 12H, our second and third Utica wells, respectively, (average 9,000 foot lateral and 67% working interest) have each cumulatively produced 3.5 Bcf after approximately 225 days online. They each continue to produce at a managed choke rate of 16 MMcf/d.Read that whole release by clicking here. Read the earnings call transcript by clicking here. And click here to view the company presentation.
In the Utica Shale, first quarter 2015 production was 2,958 Boe per day, a 29% increase compared with the fourth quarter of 2014. Production from the Dynamite 4-well pad, which was turned in line late in the fourth quarter of 2014, has outperformed expectations to date and is the largest contributor to the increase in Utica production. Average wellhead oil differentials were $10 per barrel in the Utica during the first quarter of 2015. The Company expects to turn-in-line the Cole 4-well pad early in the second quarter of 2015.Click here to read the whole release.
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