When Range Resources (ticker: RRC) completed the Renz #1 well in Pennsylvania, the Marcellus play was proven to be a viable resource play for natural gas. That was back in 2004.
Today many of the large U.S. independents operate in the Marcellus, a vast shale formation that stretches from southwestern Virginia to southern New York. The play’s prospective area is approximately 72,000 square miles.
Source: EIA
The EIA estimates the Marcellus’ proven reserves value at about 77.2 Tcf, as of 2015. The formation produces dry natural gas out of the northeastern Pennsylvania portion, but becomes more liquids rich as it trends southwest. In some areas, the Marcellus is as thick as 900 feet and with typical thickness varying between 200 and 600 feet.
With a significant amount of gas available for production, one obstacle to further development of the Marcellus is the ability for producers to move gas out of the area. Pipeline additions to the region have been slow, with approximately $16.7 billion in pipeline projects stuck in the FERC approval process—many of which are Marcellus-centric.
According to KLR group, Marcellus gas has the most attractive break-even prices of domestic shale gas, earning a 10% unleveraged return at approximately $4.20 to $4.30 per MMbtu. This is more desirable than Utica, Haynesville, or Fayetteville prices which range between approximately $5.00 and $5.70 per MMbtu for the same return.
Marcellus operators coming to EnerCom’s The Oil and Gas Conference® Aug. 13-17, 2017
- Cabot Oil & Gas Corp. (COG)
- Carrizo Oil and Gas (CRZO)
- Enerplus Corp. (ERF)
- Range Resources (RRC)
- Shell (RDS.A)
- Southwestern Energy (SWN)
EnerCom’s The Oil & Gas Conference® 22
The conference is EnerCom’s 22nd Denver-based oil and gas focused investor conference, bringing together publicly traded E&Ps and oilfield service and technology companies with institutional investors. The conference will be at the Denver Downtown Westin Hotel, August 13-17, 2017. To register for The Oil & Gas Conference® 22 please visit the conference website.
