Range Resources Corp., Fort Worth, Texas, (NYSE: RRC) is on track to complete its 2008 Marcellus shale development plan, according to chief executive John H. Pinkerton.
Pinkerton says the first phase of the pipeline and processing build out for its Marcellus shale development in Appalachia was expected to be completed in the first quarter of 2009. Marcellus production was previously anticipated to reach 30 million cubic feet equivalent per day by the end of the first quarter 2009.
He adds that due to the progress by the Range and MarkWest teams and the various subcontractors working on the project, the first phase is ahead of schedule. As a result, production is now expected to commence early in this year’s fourth quarter. At that time, he says, previously drilled wells will be turned to production and by year-end, production is projected to reach 30 million cubic feet equivalent per day.
Pinkerton says that three rigs are in operation, and the 40-well horizontal program is progressing with encouraging results. Plans are to steadily increase drilling operations to eight rigs by year-end 2009.
In addition, Range has arrangements for both water procurement and disposal to carry out these operations. Range is working closely with state and local officials to ensure that its operations are conducted in a safe and environmentally prudent manner. With regard to pipeline capacity, Range has secured firm capacity that escalates to 150 million cubic feet equivalent per day over time.
“We are in discussions to increase our pipeline capacity to over 300 million cubic feet equivalent per day,” Pinkerton says. “Lastly, we continue to aggressively build out our acreage position.”
In the Barnett shale play in North Texas, Range previously announced that it had experienced pipeline curtailments beginning in the second quarter. Recently, a large third-party pipeline expansion has been completed, providing the capacity for Range to return its shut-in Barnett gas to production.
|“Currently, our Barnett shale production is exceeding 100 million cubic feet equivalent per day,” Pinkerton says. “Range currently has six rigs running in the Barnett shale play and expects to continue to ramp up production at low cost for many years to come.”
He adds that due to the earlier than expected ramp up of the Marcellus shale development, the resolution of the pipeline constraints in the Barnett Shale, and solid drilling results in its other areas of operations, Range’s production should continue to climb through the remainder of 2008. Range anticipates that its production will cross through the 400 million cubic feet equivalent per day milestone by year-end 2008.
“Our solid drilling results coupled with the faster than expected Marcellus shale ramp-up and the pipeline constraint resolution in the Barnett shale give us significant momentum for the remainder of 2008 and into 2009,” Pinkerton says. “Essentially all the progress in 2008 has been achieved through the drillbit. Our sharp operating focus and strong natural gas hedge position will serve us well for the remainder of 2008 and as we move into 2009.
“In particular, our progress in the Marcellus shale development has greatly exceeded our expectations. The Marcellus shale produces natural gas which is less expensive, abundant and clean.”
Range Resources’ main interests are in the Southwestern, Appalachian and Gulf Coast regions of the U.S. JAS
