As Range Resources Corp. continues on a “line-of-sight” of 20% to 25% production growth per year, it benefits from holding some 540,000 net acres in southwest Pennsylvania where three stacked pays come together, combining some of the highest gas-in-place (GIP) estimates, in the Marcellus, Utica and Upper Devonian. This is according to Range Resources' president and chief executive officer Jeff Ventura, who spoke at Hart Energy's DUG East conference in Pittsburgh in November.

Range holds about one million acres prospective for shale in Pennsylvania, where the industry's rapid development of the Marcellus shale has taken production to “probably in excess of 12 billion cubic feet per day,” making it the largest gas field in North America, Ventura said. In addition to 540,000 acres in southwest Pennsylvania, Range holds 315,000 net acres in the northwest, largely held by shallow production, and 145,000 net acres in the northeast, where one rig is expected to hold acreage it plans to develop. However, while Range nominally holds one million acres, “one million acres is really more like two million net acres when you look at the prospective stacked pays,” Ventura said.

While the company holds 835,000 net acres total prospective for the Marcellus, another 580,000 acres are prospective for the deeper Utica, and a further 565,000 acres are prospective for the Upper Devonian, which lies above the Marcellus. Collectively, this adds up to just under two million acres.

Ventura presented slides showing that estimates of greatest GIP for both the Utica and Upper Devonian formations roughly coincide with Range's 540,000-acre block in southwest Pennsylvania that is currently producing from the Marcellus. The GIP estimates are “really hydrocarbon in place” estimates, he said, since they also involve condensate and natural gas liquids. A significant portion of the GIP in the Upper Devonian is in the wet-gas window of southwest Pennsylvania, while the greatest GIP in the Utica/Point Pleasant is in the dry-gas window in the southwest part of the state.

“If you take those three maps and sum them together—adding the Marcellus, Utica and Upper Devonian—the highest hydrocarbon-in-place is down in southwest Pennsylvania, where you get up to 300- to 400 billion cubic feet (Bcf) per square mile,” said Ventura. “The good news for Range is that that's where our acreage position is concentrated. Those 540,000 net acres are well-positioned relative to maximum hydrocarbon-in-place.”

While recent Utica/Point Pleasant drilling has tended to focus on the wet-gas window, Ventura described as “very encouraging” the results of Gulfport Energy's first dry-gas well in the Utica, the Irons 1-4H, which was placed on production at a 24-hour sales rate of 30.3 million cubic feet per day.

“I think there will be wells down there ultimately capable of 25- to 35 million per day or more. There's a great potential for dry-gas Utica that I think will evolve over the next 12 months or so. We're encouraged with that, and we have a great position there.”

Ventura noted Range's proved reserves had grown at a compound annual growth rate of 23%, with some 4.7 trillion cubic feet (Tcf) of resource potential moving into the proved category in the past three years. “That's really the equivalent of a nice company,” he said.

Regarding Range's 540,000 net acres in southwest Pennsylvania, “we think our acreage position down there is largely de-risked,” Ventura said, citing some 2,100 wells now drilled in the area and up to eight years of production history. For the Marcellus alone, he projected 6,750 potential drilling locations in the area, based on 1,000-foot spacing (approximately 80-acre spacing). Of these 6,750 locations, only about 500 horizontal wells had been drilled, accounting for a little more than 7% of potential locations, and now producing some 570 million cubic feet equivalent (MMcfe) per day.

Assuming all the acreage could be drilled at once, all the wells were equal, and grossing up the 570 MMcfe per day of current production by 7%, the implied result would be 8 Bcfe per day, net. “We're not saying that we can get there, but it gives us great confidence that we can get to 3- to 4-plus Bcfe per day,” said Ventura.

In addition, with three ethane contracts in place, Range has cleared a path that allows the

company to produce more than 3 Bcfe per day, net, from the Marcellus alone, he said.

“It's not just the Marcellus. The Marcellus is the driver, with great economics. But we also have high hopes for the Utica/Point Pleasant and the Upper Devonian,” he said, noting that Range will drill a Utica/Point Pleasant well in 2014 and had recently drilled a “super-rich” well in the Upper Devonian that tested at 10 MMcfe per day.