CONSOL Energy Inc. (NYSE: CNX) said Jan. 21 that most of its $1.5 million 2014 capex budget will target Marcellus and Utica shale liquids and dry gas sections. The company detailed how monies will be divided.

CONSOL has $1.1 billion going toward drilling and completions in the two shales, the company said. Some of this will be completed under joint ventures (JV), the company added.

Roughly half of the drilling capital will target the liquids-rich areas within these two plays, the company said. Dry-gas drilling will target Marcellus areas based on “superior economics resulting from high net revenue interest, economies of scale, or reservoir performance,” the company added.

This year, in a JV in the Marcellus, CONSOL and its partner will operate four or five horizontal rigs drilling at least 162 wells, the company said. About 88 wells will be in the play’s liquids-rich area, the company said, adding that two will be on acreage underlying the Pittsburgh International Airport.

Another 74 wells will drill Marcellus dry gas in six Upper Devonian laterals, CONSOL said.

Drilling plans include using shorter stage laterals and reduced cluster spacing, the company said. These methods may increase the wells’ estimated ultimate recoveries (EURs) by 15% to 20%, the company added, noting that initial production rates on wells using these methods improved by 40%.

In a JV in the Utica, 32 wells will be drilled in the liquids-rich corridor that runs across four Ohio counties, the company said. Capital for Utica reflects a $115 million reduction, the company said. The company expects the JV to cover this cost, CONSOL added.

"Our 2014 capital budget advances our E&P growth strategy," said J. Brett Harvey, chairman and CEO.

Harvey added that 2013 saw sales of low-growth, noncore coal assets that yielded roughly $1 billion. “We will apply these funds toward our aggressive 2014 natural gas drilling program," he continued.

The natural gas production growth target is 30%, and the guiding range is 215 to 235 billion cubic feet equivalent per year (Bcfe/d), the company said. Of this production growth target, 5% to 8% is expected to be a mix of natural gas liquids (NGLs), condensates and oil. Due to work in liquids-rich areas of the shales, the mix could increase to 10% or 15% by the end of 2016, while overall volumes are expected to increase 30% per year over the same time period, the company added.

Pittsburgh-based CONSOL Energy explores, develops and produces natural gas in the Appalachian Basin shales.