Sunday, April 12, 2009

Range Resources And The Marcellus Shale Gas Play

In spite of all the economic gloom and doom Americans still need natural gas. Here is one company looking at a bright future in the Marcellus Shale Gas Play of the American northeast.

Sunday, Apr 12, 2009
Posted on Wed, Apr. 08, 2009 (source)
Range Resources happy about its 2004 venture into gas field
The Marcellus Shale in the Appalachian area of the eastern United States is fast becoming one of the hottest natural gas drilling plays in the nation, the subject of speculation that its production could eventually outstrip the Barnett Shale of North Texas.

But John Pinkerton, chairman and CEO of Range Resources Corp. of Fort Worth, said the company felt quite lonely when it made a pioneering foray into the sprawling Marcellus field in Pennsylvania in 2004.

"We felt like the Marine running up the hill, coming out of the bunker, and nobody else is around him," Pinkerton told a rapt audience of several hundred people at the Omni Fort Worth Hotel on Wednesday at a Hart Energy Publishing conference on developing unconventional gas reserves.
Five years later, Pinkerton can reel off a litany of reasons why he’s ecstatic about Range’s prospects in the Marcellus, which he calls "a huge sandbox" of 65 million acres that dwarfs the Barnett Shale expanse of 3 million acres.

Walking the walk
Range is putting its money where its mouth is.
"We’ve invested almost a billion dollars in the Marcellus," Pinkerton said. "For a company our size, that’s a heck of a lot of money."

Range, with 25-plus years of experience in older Appalachian fields, has about 1.4 million net acres under lease for Marcellus drilling, making it a premier player there. Range has acreage in southwest and northeast Pennsylvania, plus southern New York.

Pinkerton said Range, which has drilled successful vertical and horizontal wells in the Marcellus, hopes to roughly triple its production in the gas shale to 80 million to 100 million cubic feet a day by year’s end. After making some initial mistakes, Range has "recorded terrific well results," with the last 10 horizontal wells brought online in 2008, making an average initial production of 7.3 million cubic feet per day, Pinkerton said.
Range is also making large investments in natural gas processing facilities and pipelines.

Marcellus pluses
A primary benefit of the Marcellus play is that "you’re in the best spot on planet Earth to sell gas" in the heavily populated Northeast and can therefore draw premium prices, Pinkerton said. Marcellus leasing costs are low and Pennsylvania doesn’t levy a severance tax on natural gas, he added.

Range’s pioneering Marcellus effort drew plaudits from another conference speaker, Mike Walen, a senior vice president of Cabot Oil and Gas Corp., also a significant player in the Marcellus.

"I tip my hat to Range Resources," Walen said. "They did a heck of a job to discover the play in 2004. This is a world-class play."

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