The Fayette County well, which is the first horizontal Marcellus Shale well drilled and completed in the county, has produced into a pipeline an average of 3.3 million cubic feet per day (“Mmcf/d”) for its first 30 days.

The Company’s second horizontal Marcellus Shale well drilled during 2009 in Greene County is exhibiting a similar flat production profile after an initial peak rate of 3.5 Mmcf/d. Both of these wells are producing at rates that exceed the Company’s assumed 4 billion cubic feet (“Bcf”) type curve. Atlas’s last four horizontal Marcellus Shale wells that were turned into line in southwestern Pennsylvania had an average peak 24-hour rate of 5.1 Mmcfe/d. (complete announcement)

Talisman Energy Inc. announced it has substantially increased its landholdings in two of the top unconventional natural gas plays in North America and is increasing its development programs.

“I am very excited as we accelerate our shale programs in North America on the heels of excellent drilling results and the continued growth of a very large, high-quality land position in two of the best shale plays in North America,” said Paul Smith, Executive Vice President, North American Operations. “We have positioned ourselves for a significant increase in drilling and production in the Marcellus shale next year and are planning to move segments of our Montney shale play to commercial development at the beginning of next year.

“We have been successful in doubling our Tier 1 unconventional acreage in the Pennsylvania Marcellus and the Montney shales over the past few months," said Paul Smith, Executive Vice President, North American Operations. "Recognizing that not all shale acreage is created equal, we define Tier 1 as top quality acreage with an expected full cycle breakeven of approximately $4/mcf. In these two plays alone, we have added 170,000 net acres through a combination of acquisitions and swaps for C$570 million. The Company now holds approximately 350,000 net acres of Tier 1 land in these two areas, with the potential for 4,800 net drilling locations.

“We have seen excellent drilling results in the Pennsylvania Marcellus and each well looks better than the previous one. Average drilling and completion costs are down to $4.3 million per well.

Our average assumption for expected ultimate recovery over all Tier 1 acreage has increased by 17 percent, to 3.5 bcf per well, with the last five wells displaying EURs of 6 bcf. Average 30-day initial production (IP) rates for wells drilled year-to-date was 4.5 mmcf/d, with the last six wells at 5 mmcf/d or better. We are currently producing over 50 mmcf/d (sales gas) and expect to exit the year at approximately 70 mmcf/d.

“With the growing success of our Pennsylvania shale program, we have decided to open an office in Pittsburgh because it makes sense to shift our center of gravity and manage the rapid growth of our US shale development programs closer to the majority of our activity. We will be keeping our field office in Horseheads, New York.

Talisman started commercial development in the Marcellus shale late in 2008. Year-to-date, the Company has drilled 31 gross wells (27 net) with approximately 60 horizontal wells planned by year end. Talisman has added a third rig and plans to move to six rigs by the end of the year. Production was 5 mmcf/d at the beginning of the year and is currently over 50 mmcf/d (Talisman working interest sales gas), with an expected exit rate of approximately 70 mmcf/d.

Average D&C costs are down to $4.3 million per well, while the average EUR has increased by 17 percent to 3.5 bcf per well, with the last five wells in the Marcellus at 6 bcf. Thirty day IP rates for all wells drilled year-to-date have averaged 4.5 mmcf/d, with the last six wells at 5 mmcf/d or better.

The Company started the year with 140,000 acres in the Pennsylvania Marcellus, 90,000 of which the Company internally high-graded as Tier 1 acreage. Through a combination of land acquisitions (at an average cost of $3,250/acre) and land swaps, Talisman has added over 90,000 Tier 1 acres in the Pennsylvania Marcellus shale year-to-date, doubling its Tier 1 acreage to approximately 180,000 acres. Talisman believes it has approximately 1,800 net well locations on this acreage.

The Company expects a full cycle breakeven on this Tier 1 acreage of approximately $4/mmbtu.

In total, Talisman currently holds 214,000 net acres in the Pennsylvania Marcellus. These are highly contiguous acres concentrated around the Bradford and Tioga counties in northeastern Pennsylvania.

The complete announcement is available online.