EQT Turns a Profit After Suspending Utica Shale Drilling
From The State Journal:
EQT drilled 66 wells in the second quarter, with 43 of those in the Marcellus Shale and 43 in the Upper Devonian Shale. In anticipation of the merger with Rice Energy, EQT suspended its Utica Shale test program as improved returns on Marcellus wells resulting from longer laterals made possible by the Rice acquisition are higher than the return expected on the average Utica well. EQT’s 2017 sales volume guidance was reduced by 10 billion cubic feet equivalent to 15 Bcfe as a result of the suspension of the Utica test program.
Utica wells are more expensive to drill than Marcellus wells, as the Utica Shale is deeper. EQT had been testing various technologies to bring down the cost of Utica wells to where they would be competitive with Marcellus wells. Rice has Utica wells in Ohio.
EQT announced in June that it had reached an agreement to acquire Rice in a $6.7 billion deal that would make it the largest natural gas producer in the United States and triple EQT’s pipeline capacity to the Gulf.
EQT would acquire 187,000 acres of Marcellus Shale from Rice in Pennsylvania. It would also acquire 64,000 acres of Upper Devonian Shale in Pennsylvania, 105,000 acres of Utica Shale in Pennsylvania and 65,000 Utica Shale acres in Ohio. Rice has no acreage under its control in West Virginia.Click here to read the whole article.
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