Who says there is nothing new under the sun? In Ohio’s Guernsey County, Eclipse Resources Corp. added a wrinkle to the lateral-length arms race by successfully drilling and completing an 18,554-foot horizontal leg in the condensate window of the Utica Shale. The Purple Hayes 1H assumed the pole position as the longest lateral fully completed within zone when operations concluded in April 2016, according to directional drillers involved with the project.

While the technical achievement stands on its own, the implications stretch beyond southeastern Ohio as the industry stares eyeball to eyeball with an extended low commodity price environment. Longer laterals and effective zonal placement are part of a rapidly evolving recipe for capital efficiency that allow operators to reduce well costs and extend the economic potential for hydrocarbons.

First, the particulars. Drilling commenced in January 2016 and reached a total measured depth of 27,048 feet in 17.6 days. The completion began in March with a proppant load of 1,400 pounds per foot of 100 mesh sand with 40/70 and 30/50 mesh sand delivered via slickwater plug and perf across 124 stages at 150 foot intervals. The 23.4 day completion used a single snubbing unit for drilling out plugs and incorporated such novel features as recycled produced water and nearby wellhead natural gas to power the bi-fuel engines on the frack pumps, eliminating water disposal costs and the expense associated with 57,000 gallons of diesel fuel.

The completion averaged 5.3 stages per day, ranging from four stages at the toe to more than seven stages per day at the heel.

Why go long? The main driver is economics. Oleg Tolmachev, vice president of drilling and completions for Eclipse, told attendees at Hart Energy’s DUG East Conference in Pittsburgh that longer laterals reduce finding and development costs by up to 30% in the Utica Shale’s condensate window while increasing the company’s per well internal rate of return from 30% to 70%.

From a practical standpoint, extended laterals require fewer pad sites and roads, which can add $1.5 million for each Appalachian well site. Longer laterals also entail a smaller environmental impact and reduce bothersome truck traffic.

Eclipse competes in the Utica on the basis of superior execution versus larger, technically astute peers by drawing upon a talented cross-disciplinary team with multi-year Utica experience. The team’s background is augmented by strong third party service company relationships.

Purple Hayes 1H was a new evolutionary marker on a continuing technical journey that saw Eclipse boost lateral lengths by 200% to 13,000 feet in 2015 with a corresponding 50% decrease in cost per foot.

The Pennsylvania-based public independent is an Appalachian pure play with 100,000 net acres in the Utica core. Purple Hayes was the only well Eclipse drilled in the first half of 2016 although Eclipse will resume a one-rig program on a $168 million capital budget in the second half of the year.

Top-name peers nearby are reporting drilling and completion costs of $1,100 to $1,450 per foot for laterals in the 9,000 to 10,000-foot range. The 18,554-foot Purple Hayes lateral targets the same 1 billion cubic feet equivalent per foot in Utica condensate reserves at a drilled and completed well cost of $854. Payout on the $15.8 million well is expected in approximately six months; however, Eclipse is studying how extended length laterals impact estimated ultimate recovery.

There were few technological barriers, although an intense planning and design process with vendors spanned more than 60 days and incorporated numerous simulations to better understand torque and drag or explore mud rheology in an updip lateral featuring pressure variations and potential communication with neighboring laterals on adjacent pads.

Keeping the lateral in zone within a narrow five-foot window on a single PDC bit run allowed placement of 5.5 inch casing out to 27,000 feet in a problem-free 44 hour run. Meanwhile, the completion process saw placement of 98% of proppant across 124 stages, even though one stage exhibited a lithologic anomaly.

Implications? Extended laterals reduce costs. Purple Hayes shows it is possible to drill horizontals to 22,000 feet in the Utica condensate window off multi-well pads, but there are limitations as to how far operators can kick off laterals from a single surface service point and successfully run casing. Further cost reduction on drilling and completion is within reach, and the extended lateral technique is transferrable across basins. What’s not to like?