CONSOL Energy Inc has announced operations update for the quarter ended June 30th 2012.
Gas Division Operations
In addition to the record daily flow rate cited above, the Gas Division has been extending its completed laterals. In 2011, the average completed lateral was 3,300'. For wells turned on line in the first half of 2012, completed laterals have averaged 4,600'. Longer laterals, when combined with other efficiencies such as pad drilling, help to make CONSOL's Marcellus Shale program economic at current projected prices.
CONSOL's economics are also being improved by cost reductions in items such as costs per frack stage. In 2011, CONSOL was spending USD 205,000 per stage. In 2012 to date, frack costs have fallen to USD 181,000 per stage.
Another first for the Gas Division in the quarter was the use of water from coal mines for hydraulic fracturing. This is another in a long line of synergies between CONSOL's coal and gas divisions. The three well Morris 14 pad in Southwest Pennsylvania was fracked with a 10% blend of mine-sourced water. The pad came on line in early July and was producing at an initial rate of 18 MMcf per day.
Marcellus Shale Dry Gas (CONSOL Energy operated):
Central PA: During the second quarter, CONSOL Energy drilled five Marcellus Shale wells, finishing the six well DeArmitt pad in Westmoreland County with drilled lateral lengths exceeding 8,000'. Completion operations at the DeArmitt pad are scheduled to begin during the third quarter.
Completion operations were concluded during the second quarter at the eight well Aikens pad in Westmoreland County. A total of 152 stages were completed with lateral lengths of up to 7,249' (25 stages). This pad commenced production in early May with a peak rate of 34.4 MMcfd. As of June 30th 2012, the Aikens pad was still producing 32.2 MMcfd.
The four well Gaut 4 pad in Westmoreland County, which the company finished drilling in the first quarter of 2012, was completed late in the second quarter. This pad has 109 stages and lateral lengths ranging from 7,243' (24 stages) to 8,460' (29 stages). Stimulation flow back is ongoing with the initial well, the Gaut 4A, producing at a peak rate of 17.9 MMcfd. This is a record daily production rate for any well in the company's history.
The four well Bowers 1 pad, where drilling was completed in the first quarter, is the first horizontal exploration drilling by CONSOL in Jefferson County. Receipt of a centralized impoundment permit is anticipated, which should enable the company to hydraulically fracture the wells during the fourth quarter of 2012.
CONSOL Energy has completed its planned operated rig drilling in Central Pennsylvania for 2012.
Southwest PA: CONSOL Energy continues its full scale development drilling at several pads in Greene County. During the first quarter, CONSOL drilled ten wells and brought eight wells online at several pads with completed lateral lengths averaging 4,201'. Two additional wells were brought on line at the five well Morris 9 pad, two wells were brought on line at the two well NV 13 pad, and four wells were brought on at the four well NV 30 pad. Results continue to be strong in this area.
In Southwest Pennsylvania, CONSOL Energy currently has two rigs drilling.
Northern WV: CONSOL Energy drilled two wells during the quarter, both on the Philippi 4 pad in Barbour County. The three-well Philippi 4 pad will be completed in a total of 69 stages during the third quarter. The pad will have completed lateral lengths ranging between 6,333' to 6,719'. Production from Philippi 4 is also scheduled to begin during the third quarter.
The six well Alton 2 pad in Upshur County, with drilling having been finished in the first quarter of 2012, was completed late in the second quarter in 135 stages, with completed lateral lengths ranging from 3,545' (12 stages) to 5,941' (25 stages).
Stimulation flow back is ongoing at Alton 2 and early flow back and production results appear to be improved over the initial Alton 1 pad, which was drilled and completed in 2011. The Alton 2F, the shortest of the Alton 2 pad wells (3,545') reached a peak production rate of 3.5 MMcfd.
CONSOL Energy has completed its planned operated rig drilling in Northern West Virginia for 2012.
Marcellus Shale Wet Gas (Noble Energy operated):
Noble Energy drilled six wells on the SHL-6 pad, planned for 7 wells total, in Marshall County. First sales are expected later this month, with the completion of the Majorsville compressor station. During the second quarter, Noble completed the 5 well SHL 1 pad, which had been previously drilled by CONSOL Energy, in 69 stages and completed lateral lengths up to 6,234' (20 stages).
Stimulation flow back is underway on the pad, with production also feeding into Majorsville. Completion operations are ongoing on the eight well SHL-3 pad. At the end of the second quarter, 75 of 130 total planned stages had been stimulated. Production from the SHL-3 is expected to commence by the middle of the third quarter.
Noble Energy has one rig drilling in the liquids rich area of the Marcellus Shale. Two additional rigs are expected to arrive in the third quarter. Noble Energy now expects to drill 31 wells in 2012 on its operated acreage, down from earlier expectations of 39 wells.
Ohio Utica Shale (CONSOL Energy operated):
In the Utica Shale joint venture with Hess Corporation, CONSOL Energy has completed its first horizontal well, the TUSC 3A, in the western portion of Tuscarawas County, Ohio. The well was completed in 17 stages with a completed lateral length of 4,915'. During initial flow back, commercial amounts of light crude oil with a 38 degree API gravity, and 1,440 Btu gas, were encountered.
The well is currently shut in for further dissipation of hydraulic fracturing fluids, calculation of a bottom hole pressure, and the installation of permanent production facilities.
CONSOL Energy is operating two horizontal rigs in the Utica Shale, one in Noble County drilling the NBL 1A and another in Portage County drilling the PRT 2A. Additionally, CONSOL Energy has finished drilling the top hole for a horizontal well in Mahoning County.
In total for 2012, CONSOL Energy expects to drill about 12 wells on its acreage in the Ohio Utica Shale, down from earlier expectations of 16.
Ohio Utica Shale (Hess operated):
Also, our joint venture partner, Hess Corporation, is operating one joint rig in Belmont County, drilling the Capstone 2H-9.
In total for 2012, Hess expects to drill 6 wells on its acreage in the Ohio Utica Shale, consistent with earlier expectations.
Mr J Brett Harvey chairman & CEO of CONSOL said that "The impressive results that were achieved by our entire operations team during the second quarter reinforce our belief that adherence to our core values of safety, compliance and continuous improvement drives success. I commend our employees for their daily commitment to these values."
Source - CONSOL Energy
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