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Range Resources Reports Double-Digit Production Growth, Lower Costs In Marcellus Play
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Range Resources natural gas company achieved three key objectives: consistent double-digit production growth, lower unit costs in nearly all categories and a stronger financial position through asset sales and capital discipline.
Production averaged 465 Mmcfe per day, a record high for the Company and a 12 percent increase over the prior-year quarter. This represents the 29th consecutive quarter of sequential production growth. On a unit of production basis, direct operating costs, exploration expense, general and administrative expense and depletion, depreciation and amortization expense (excluding non-recurring items) all decreased over the prior-year quarter.
During the quarter, the Marcellus Shale Division continued its evaluation of Range's horizontal Upper Devonian and Utica test wells in Pennsylvania. Initial results of both wells are encouraging and both wells are currently awaiting pipeline connection.
To date, Range has drilled 120 horizontal Marcellus wells, of which 31 are awaiting completion and eight are awaiting pipeline hook up. In the southwest portion of the play, where we have drilled the majority of our wells and have been accumulating data for over three years, the average estimated ultimate recovery ("EUR") for a Marcellus horizontal well with an average lateral length of 3,056 feet and completed with 10 stages is 5.0 Bcfe gross versus our prior completions which resulted in an average estimate of 4.4 Bcfe per well. The zero time plots for all those wells are now on our website.
Range is increasing its range of EURs for the entirety of our "high-graded" acreage in Pennsylvania to 4.0 to 5.0 Bcfe up from 3.0 to 4.0 Bcfe per well. As has been demonstrated in other shale plays, it appears that the longer laterals and additional frac stages result in higher initial production rates, higher EURs and improved economics.
Currently, Range is running 13 drilling rigs in the Marcellus play. Plans are to exit 2010 with up to 16 rigs. Range is still on track to exit 2010 at 180 to 200 Mmcfe net per day. For 2011, we plan to increase our rig count in the Marcellus and exit the year with up to 24 rigs running.
Finally, the contracted build out of the Marcellus midstream infrastructure is progressing as scheduled. During the first quarter Range entered into a multi-phase gathering and compression agreement with a third-party to initially build the dry gas pipeline and compression capacity to meet our needs in the Lycoming County area. The first phase volumes are expected to come on line by year end 2010 in Lycoming County.
The full quarterly report is available online.
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5/3/2010 |
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