For more reports on DUG East, check back over the coming days or follow @HartEnergConf on Twitter.

PITTSBURGH—Eclipse Resources Corp. (NYSE: ECR) has broken several laterals records in the Utica Shale, and President and CEO Ben Hulburt told DUG East attendees on June 20 that he expects to break more records for length.

Hulburt was joined by other upstream producers as well as midstream operators and industry experts who gathered at the David L. Lawrence Convention Center in Pittsburgh for the 10th annual DUG East conference and exhibition to discuss Marcellus and Utica activity, regional infrastructure and emerging regulatory issues in Appalachia.

“We believe we are the industry leader in onshore laterals," said Hulburt, who spoke during an afternoon operator spotlight session. "Frankly, we’ve become quite good at it.”

RELATED - Eclipse Resources: Storming Utica's Castle (requires subscription)

Eclipse, an E&P focused on the Appalachian region, is drilling super-laterals in the Ohio Utica and in northeast Pennsylvania, guiding to 8%-14% annual growth in 2018. The company's condensate production is also expected to grow about 42% this year.

“If you’re not going to be a low-cost producer, you’re not going to survive in this environment," Hulburt said. "So, we constantly innovate.”

Longer laterals allow companies to maximize opportunities while also minimize footprints, Dennis Degner, senior vice president of operations at Range Resources Corp. (NYSE: RRC), told attendees earlier during the conference.

Growth has to be smart, Degner said noting that Range has to balance several factors including the needs of investors, takeaway capacity, service costs and development of the resource base.

Range projects 11% growth this year, on a steady-as-she-goes trajectory utilizing pad sites set up for long-term development of Upper Devonian, Marcellus and Utica reservoirs. The company also typically keeps well spacing between 750 ft to 1,000 ft, he said.

Private Appalachia Operators

Michael John, CEO of West Virginia-based Northeast Natural Energy (NNE), expects his company to have 90 wells online by next year.

NNE currently has 57 wells online and produces 200,000 Mcf/d, but the infrastructure is in place for the company to expand in accordance with its plans, John told attendees during an operator spotlight.

John said a small company like NNE can thrive in Northern West Virginia because it knows the land. Complex mineral ownership structure is an impediment but co-tenancy laws help industry, he added.

During a conference panel of other private operators, Eric Reigle, COO of Rockdale Energy LLC, and Mark Rothenberg, CEO of APEX Energy LLC, talked about how their companies work quietly but effectively in the prolific plays of Appalachia.

Reigle said Rockdale plans to spud Harer 713 2H in Texas Creek Region. It has about 40 MMcf/d in Texas Creek.

Rockdale is an opportunity-driven oil and gas company with operations in South Texas and Pennsylvania. The mission of the company is to gain growth by acquiring assets with additional identified upside to further add and improve the value of oil and gas properties.

Rothenberg continued the private operators panel with keys to success in Appalachia: economic single well returns, acquiring drillable acreage and controlling the midstream to ensure low gathering fees.

He said land and permits are the challenge for APEX’s main project in Westmoreland County, Pa.

"We’re very fortunate to have consolidated our position," he said. "We put a lot of time and money into setting it up for continuous operation.”

Methane Emissions

On a panel covering methane emissions, Jim Sewell, Appalachia environmental manager for Shell Oil Co., and Thomas Murphy, director of Penn State's Marcellus Center for Outreach and Research, spoke about finding the rational middle for natural gas development.

The panelists said people are increasingly recognizing that methane is something they use in their daily lives. The industry uses an array of technologies to mitigate fugitive emissions, but it’s an evolving understanding of the best practices, according to the panelists.

The leak rate for fugitive emissions in the state of Pennsylvania is “very low,” Murphy said.

Sewell added that the industry needs to be vigilant in finding leaks and fixing them. It’s a combination of that and smart regulations to continue to reduce emissions, he said.

Shale Gas Jumpstarts Appalachia

Shale gas is remaking and rejuvenating the entire Appalachian Basin region, Tim Dugan, executive vice president and COO of CNX Resources Corp. (NYSE: CNX), told DUG East attendees during a morning operator spotlight.

“Many outside of our industry do not realize how disruptive shale gas development is,” Dugan said.

CNX, formerly Consol Energy, is an independent E&P based in Canonsburg, Pa., with more than 1 million net acres in the Marcellus and Utica shale plays. For 2018, the company plans to run three rigs on its acreage through the first half of the year targeting production volumes of 520-550 Bcfe, which equates to a roughly 30% annual increase.

Tom Petrie, chairman of Petrie Partners, told DUG East attendees that the Marcellus, and to a degree the Utica, has dominated the natural gas supply mainly due to cost as infrastructure buildout remains critical to growth in the Gulf Coast market.

“We are looking at a new natural gas world unfolding as the U.S. is on the verge of becoming a top three LNG exporting country,” Petrie said.

In a June 13 report, McKinsey Energy Insights (MEI) forecast that the Marcellus, Utica and Permian shale plays will supply 55% of the North American gas market by 2030.

The Marcellus and Utica currently account for 27% of total U.S. and Canadian supply, and MEI projects that percentage will grow to 40% by 2030. However, additional infrastructure will be needed to keep pace with the rapid production growth and enable operators to capitalize on a higher wellhead price for export markets, MEI said in the report which explored gas supply and demand projections to 2030.

Overall, robust growth in Appalachia production is expected to continue, Stephen Beck, senior director of North America Shale with Stratas Advisors, said during a conference panel on economics.

The Appalachia region’s production will grow by 3.1 Bcf/d in 2018, Beck said. Further, he added that Appalachian producers have increased production by 77% since 2015 while lowering F&D costs by 74%.

On the same panel, Randy Wright, president of Wright & Co. Inc., said there are now 10,000 Marcellus and 2,000 Utica/Point Pleasant wells in Appalachia.

One critical factor for success is optimizing the landing target and staying in the zone, Wright said adding that another is increasing lateral length.

Tonya Williams, general manager at Shell Oil, opened the conference with the announcement that the company's world-class cracker in Pennsylvania will be operational in the early 2020s. The U.S. Pennsylvania Chemicals Project is expected to upgrade locally-produced ethane from Marcellus and Utica shale gas production.

On the upstream side, Shell has 80 Tcf (gas-in-place) of risked resource base in Appalachia, Williams said.