Range Resources: Triple play in Marcellus

The college baseball season already is underway, major league teams are in spring training and Range Resources CEO John Pinkerton is excitedly talking "triple play."

But not the baseball kind of triple play, where you get three outs and retire the opposing side in one fell swoop.

Pinkerton is talking about the huge Marcellus Shale natural gas play in the Appalachian region of the eastern U.S., where Range--a Fort Worth-based natural gas and oil producer--plans to drill on a vast acreage and already is producing the equivalent of 260 million cubic feet of natural gas per day, with plans to reach 400 million by the end of this year and exceed 600 million by year-end 2012.

Pinkerton, in a conference call with investment analysts Tuesday, said he views the Marcellus as a triple play--"really three plays in one."  Range has the potential not only to produce natural gas and natural gas liquids from the Marcellus Shale, but also from the Upper Devonian Shale above the Marcellus and the Utica Shale about 1,000 to 2,000 feet below the Marcellus.

That triple-play potential makes it "one of the most economic plays in North America," Pinkerton told analysts, according to a transcript released by the Morningstar investment research firm.

"A very significant advantage we'll have in developing the Upper Devonian and Utica will be that we'll be drilling where we've been drilling Marcellus wells," Pinkerton said. In those instances, Range already will have "incurred the cost for acreage, roads, surface location, water management, gas lines and compression," he said.

"Therefore, the incremental costs to develop the Upper Devonian and Utica will be reduced by approximately one-third versus developing those zones on a stand-alone basis," he said. "We believe this will allow us to continue to drive down the cost of the entire play."

Range believes that "approximately 60 percent of 700,000 net acres that we plan to develop for the Marcellus has potential for the Upper Devonian and Utica shales," Pinkerton said.

Range is particularly excited about a new "stepout" Marcellus well in southwest Pennsylvania that yielded the equivalent of 18.6 million cubic feet of natural gas per day on a five-day test.

 "It is our very best well yet," Range Senior Vice President Rodney Waller told the Star-Telegram today.  It's called a step-out well because it is 35 miles "from where the heart of our drilling is," and thus offers a promising new area for development, Waller said.

Pinkerton said Range believes that it ultimately will realize net production equivalent to two to three billion cubic feet of gas per day from the Marcellus.

If Range achieves that production level--roughly half the daily production from all operators in North Texas' Barnett Shale--"that will be huge and our shareholders are going to make a whole bunch of dough from that...including all of our employees that have a lot of stock," Pinkerton said.

--Jack Z. Smith 

Comments

[John Bass]

Oh great, another region of the US where the ground water can get contaminated, air poisoned, and cancerous chemicals released for human consumtion all in the name of "good business for America"!!!

[Matt]

Mr Bass, if you haven't studied hydrology, it's best time to shut your mouth and leave the talking to the experts. Thanks :)

[gUDRUN sCOTT]

There are three advertisments on this page and two of them talk about how to take a cruise.

I take a cruise just walking thru the neighborhood-- beautiful scenery and wildlife.

Remember Appalachia-- it also was a jewel of beauty before 500 mountains were blown up. Is this what we do in the USA to make money and run off on a cruise to get away from our own conscience? I would prefer to save money and energy and fight to keep the hydrofracking out of my neighborhood and yours.

[halftiderock]

Mr Bass, Hold on with some knowlege ignorance can be cured. It is stupidity that lasts forever.

[GeoSciGuy]

Great is right. Clean burning domestic energy to heat our homes, fuel our buses and trucks and fuel our factories to get people back to work. I am a Professional Geologist and Professional Environmental Engineer and I can't think of anything on the table that will be better for the environment (by reducing air pollution) than the development of clean burning natural gas. Not to mention the economic benefits to Pennsylvania.

A lot more people will die of poverty than pollution.

[Kim Feil]

Natural Gas is not cleaner than coal when you take in the extraction and life cycle, transportation and methane leakage...research Cornell University Howarth study. Also urban drilling has the unknown long term, multiple substances being mixed at cumulative levels of exposure that permanently changes the ambient airshed in urban and rural areas. The explosive growth will only negatively affect our air, soil and water not to mention the human error emission events.

[virtuallyme]

drill a gas well
bring a soldier home