Producers speaking at Hart Energy's Marcellus Midstream Conference and Exhibition held in Pittsburgh confirmed a great deal of further natural gas liquids (NGL) potential in the Marcellus and Utica shale plays in the northeastern U.S.
In fact, in Pennsylvania alone, the Marcellus has a resource potential of some 434- to 559-million bbl. of liquids and 16.1- to 21.6-Tcf of gas, says Rodney Waller, senior vice president of Fort Worth-based Range Resources Corp. Also, the state's Upper Devonian formation has a resource potential of 8- to 12-Tcf equivalent of gas and as much as 368 million bbl. of liquids.
In Pennsylvania, the resource is spread throughout some 125,000 acres of super-rich (1,350 Btu) area in the west, 210,000 acres of wet-gas (about 1,200 Btu) in the mid-range area and 235,000 acres of dry-gas (1,050 Btu) in the eastern section of the play.
"Generally, ethane will double the liquids barrels," says Waller. "And only 10% of the acreage has been drilled."
Meanwhile, Waller points to the fairly organized buildout of the Marcellus shale as a template for the coming buildout of the Utica. He cautions against too many operators implementing midstream systems without networking.
For coordination, producers and midstream companies must have the same "vision of the future," he says, which includes an "instinctive trust" that each party has the ability to perform despite challenges and obstacles.
Upstream and midstream operators must integrate the teams to listen, understand and streamline the buildout process and minimize costs for all projects. Each side should perform, and hold each other responsible for that performance, he advises.
So what's next for Range Resources? Waller and his team will look for more locations for processing plants as Range expands its drilling in the wet and super-rich areas, he says. He believes the wet Utica "will draw more global ethane purchasers to Appalachia for everyone's benefit," and getting the Mariner East pipeline system operational will open up global markets for all products.
Later during the conference, Gary Evans, chairman of the board and chief executive of Houston-based Magnum Hunter Resources Corp., noted the need for constantly improving technology in unconventional plays due to their formations. In the northeast, Magnum is focused on the Marcellus, Utica, Huron and Weir plays.
Evans intends the company to become a "drilling factory" within the three shale plays where it has assembled significant property positions, including more than 58,000 acres in the Marcellus, more than 61,000 acres in the Utica, and more than 300,000 acres in southern Appalachia.
"The Marcellus is one of the most attractive shale plays in the U.S.," says Evans, pointing to the play's lowest break-even price level of all of the shale plays due to its proximity to high-density population centers and access to interstate pipelines, which allows production to remain attractive throughout commodity price cycles.
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