American Oil and Gas Reporter - November 2017 - 68

SpecialReport: Marcellus/Utica Activity

PennEnergy has built a consolidated land position of more than 80,000 net acres in Pennsylvania's Armstrong, Butler and Beaver counties, where the company projects to have
65 producing Marcellus wells by year's end. PennEnergy emphasizes that it strives to
preserve that acreage by incorporating extra steps to avoid emissions and maintaining
a sterling environmental and safety record.

water fracs with some proprietary chemistry to help with condensate recovery,"
Muse points out.
The company is optimizing its perforation placement with a frac rate of 100
barrels a minute as its completion technique continues to evolve. Its estimated
ultimate recovery is pushing 2.8 Bcfe
per 1,000 feet of lateral, Muse reports.
PennEnergy Resources is backed by
private equity, but he says "we are looking
to sell the company or have a public offering in the next year. All things are on
the table. Gas prices have stabilized and
the company has matured. We are looking
to monetize the company for our investors."
He observes that an abundance of gas
transportation projects are coming on
line soon in the region, which inevitably
will improve take-away capacity. In 2018,
PennEnergy will begin sending its NGLs
by way of the Mariner East pipeline to
the Marcus Hook facility in Philadelphia,
where its product can be sent to markets
in Europe and Asia. Meanwhile, Muse
says its natural gas liquids are going to
MarkWest's Bluestone cryogenic gas processing plant near Evans City, Pa., where
the methane residue gas is separated from
the NGLs.
Doing It Right
Muse expresses pride in PennEnergy's
safety and environmental track records.
"From day one, we have endeavored
to be as conscious of the environment as
68 THE AMERICAN OIL & GAS REPORTER

possible," Muse emphasizes. "In our rich
gas area, where we are producing condensate, we separate and meter it at the
well site, but we recombine it with the
gas and truck or pipeline it to a single location to gather the condensate. It is a
safe operation, and we have reduced
emissions. We also never have put flowback water into earthen impoundments.
Those are a couple examples of our
earliest efforts. We have a strong environmental record with no fines, and our
safety record is outstanding."

Although PennEnergy remains focused
solely on the Marcellus and Upper Devonian, Muse predicts activity also awaits
for the Utica underlying its acreage.
"Frankly, right now it is a matter of return
on investment," he says. "The Utica will
get developed over time, whether by us
or our successor."
PennEnergy is producing 200 Mcfe/d
with 900 barrels of condensate, Muse reports, but he projects that the company
will exit 2018 with twice that much. It
has been running one horizontal rig since
2016, but has expressed plans to pick up
a second rig in December. He claims
PennEnergy estimates its core acreage
positions contain nearly 1,000 horizontal
locations in multiple proven producing
horizons.
Deep, Dry Utica
CONSOL Energy has 683,000 acres
prospective for the Utica Shale, 413,000
acres in the Marcellus and 304,000 acres
in the Upper Devonian across Pennsylvania, West Virginia and Ohio, reports
Andrea Passman, vice president of engineering and development.
"With our asset sales during the past
year, we have tightened our position to
focus on the stacked pays," she relates.
"We have all three horizons on much of
our acreage."
While the Marcellus has been the early
focus, Passman describes CONSOL as
one of the early movers in the deep, dry

Thanks to a position that includes many acres containing three horizons, CONSOL Energy is beginning to focus on stacked pays. The company also indicates that using ceramic proppants in the Utica is helping its dry gas wells produce 3.0 MMcf-3.5 MMcf per
1,000 linear feet in Pennsylvania and West Virginia.

American Oil and Gas Reporter - November 2017

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