CONSOL Energy Inc. (NYSE: CNX) reports operational update for its gas division.
CONSOL gas division produced 41.8 billion cubic feet equivalent for the 4Q 2012, or 5% more than the 39.7 billion cubic feet equivalent produced in the 4Q 2011. Annual 2012 gas production was 156.3 billion cubic feet equivalent (net to CONSOL).
During the quarter, CONSOL Energy completed its second well in Noble County, Ohio. This Utica shale well, the NBL 16A, was completed with 16 stages and tested at 12 million cubic feet per day and 768 barrels condensate per day. This well is currently shut-in for further dissipation of frac fluids and the installation of a gas gathering system. The early results from this well, coupled with the results from the previously announced NBL 1A well, in addition to competitor data, gives the company confidence to begin transitioning its Utica shale program in Noble County from an exploration mode to a development mode. CONSOL now plans to drill 11 wells in Noble County in 2013.
CONSOL Energy expects its 2013 gas production to be approximately 170 – 180 billion cubic feet equivalent (net to CONSOL). 1Q 2013 gas production, net to CONSOL, is expected to be approximately 39 – 41 billion cubic feet, or slightly lower than the 41.8 billion cubic feet equivalent produced in the 4Q 2012, as frac schedules and other seasonal factors are expected to limit wells turned into line.
For 2012, the gas division worked the entire year without having recorded a lost-time incident. The gas division was thus able to continue its streak – dating back to 1994 – of its employees working without a lost-time incident during the course of some 5 million hours. Gas operations' commitment to environmental excellence was reflected in a 53% improvement in their compliance record, year-on-year.
CONSOL Energy had a very successful 2012 Marcellus shale drilling program where the joint venture with Noble Energy drilled 89 gross wells, with 64 drilled by CONSOL and 25 drilled by Noble Energy.
Southwest Pennsylvania: In Southwest Pennsylvania, CONSOL Energy currently has two horizontal rigs operating and plans 23 wells with an expected average drilled lateral length of 5,800 feet during 2013 for Greene and Washington counties.
Central Pennsylvania: CONSOL Energy does not currently have any horizontal rigs drilling in Central Pennsylvania but plans to drill five wells with an expected average drilled lateral length of 8,300 feet in 2013, all in the Mamont Field of Westmoreland County.
Northern West Virginia: Within the Northern West Virginia district, the company completed three Barbour County wells, with EURs of 7.5 billion cubic feet, and 6 Upshur County wells, with EURs of 3.2 billion cubic feet. CONSOL Energy does not currently have any horizontal rigs drilling in Northern West Virginia but plans to drill eight wells with an expected average lateral length of 8,200 feet during 2013, 6 in Philippi and single well pads at Audra and Century to test the productivity of our southern Barbour County and northern Upshur County leasehold between Philippi and Alton.
Marcellus Shale Wet Gas (Noble Energy operated): In the wet gas portion of the Marcellus shale, Noble Energy drilled 25 wells and completed 20 wells during 2012. Noble Energy began production in Marshall County, W.Va., on July 31, with the 5-well SHL 1 pad. Current production is greater than 39 million cubic feet per day gas and 300 barrels condensate per day from these 20 wells. Also turned into production at Marshall County during 2012 was the 8-well SHL 3 pad and the 7-well SHL 6 pad. During 2012, Noble Energy sold approximately 2.8 billion cubic feet of "residue" gas, 32,000 barrels condensate, and 145,000 barrels natural gas liquids. Assuming $3.35 per thousand cubic feet for dry gas, the realized flowstream remains greater than $7 per thousand cubic feet including the liquid hydrocarbon component without full ethane recovery.
Noble Energy currently has three horizontal rigs drilling in Northern West Virginia and Southwest Pennsylvania One rig is finishing the fifth well of eleven at the SHL 8 pad in Marshall County, W. Va., one rig is rigging up at the seven-well WFN1 pad in Washington County, Pa., and one rig is drilling at the six well NORM 1 pad in Gilmer County, W. Va. Noble Energy expects to add one additional horizontal rig in March, June, and July of 2013. The plan is to exit 2013 with six horizontal rigs while drilling 85 to 90 wells with an average length 6,365' in the Marcellus wet gas area in 2013.
Ohio Utica Shale (CONSOL-operated): In the Utica shale joint venture with Hess Corp., CONSOL Energy drilled its first eight wells with drilled lateral lengths ranging between 2,785 and 7,568 feet and completed its first 4 wells in 2012.
Tuscarawas County: The TUSC 3A in the western portion of the county had a drilled lateral length of 5,020 feet and was completed with 17 stages. The company had previously announced a peak production rate of 400 barrels of oil per day and 386 thousand cubic feet per day of gas from the TUSC 3A. The TUSC 8A, with a drilled lateral length of 7,568 feet, was recently drilled as an offset to the TUSC 3A and completion by 24 stages is planned during the first quarter of 2013.
Noble County: Two wells were drilled and completed in this county, the NBL 1A with a drilled lateral length of 4,394 feet and the NBL 16A with a drilled lateral length of 4,793 feet. The NBL 1A was completed with 14 stages and tested 9.0 million cubic feet per day gas and 10 barrels condensate per day while the NBL 16A was completed with 16 stages and tested 12 million cubic feet per day and 768 barrels condensate per day. Both of these wells are currently shut in for further dissipation of frac fluid and the installation of a gas gathering system.
Portage County: The PORT 2A was drilled to a lateral length of 4,690 feet and was completed with 16 stages. Good shows of gas and oil were encountered during frac plug drill out operations. The well is currently shut-in for dissipation of frac fluid.
Mahoning County: Three wells were drilled in this county in 2012. The MAH 2A was drilled with a drilled lateral length of 2,785 feet and completion of nine stages is expected to begin during 1Q 2013. The company’s first multi-well Utica pad was drilled at the MAH 7 pad where the MAH 7A was drilled to a drilled lateral length of 5,411 feet and the MAH 7C was drilled to a drilled lateral length of 5,290 feet. Completion of both MAH 7 wells is planned for 2Q 2013.
CONSOL Energy currently has two horizontal drilling rigs operating in the Utica shale and plans 11 wells during 2013, all in Noble County. Production from these wells in 2013 is estimated to be less than 5 billion cubic feet equivalent, due to infrastructure requirements.
Ohio Utica Shale (Hess-operated): The company’s joint venture partner, Hess Corp., drilled two joint wells, while completing one joint well during 2012. The Athens A 1H-24 in Harrison County was recently tested at 13.9 million cubic feet per day and 1,056 barrels condensate per day and is currently shut in for further dissipation of frac fluid. The Jeffco A 1H-6, also in Harrison County, is currently being drilled out following a 15-stage stimulation. Hess currently has 1 horizontal rig drilling on their operated portion of our joint venture in eastern Ohio, drilling on the 1H-23 in Harrison County, and plans to drill 16 joint horizontal Utica shale wells during 2013.
Headquartered in Canonsburg, Pa., CONSOL Energy Inc. is a diversified energy producer in the Appalachian basin.