American Oil and Gas Reporter - November 2019 - 47

SpecialReport: Marcellus/Utica Activity
"Southwestern Energy continues its
commitment to the environment by being
freshwater neutral," says William J. Way,
president and chief executive officer. "In
fact, we have been freshwater neutral
since 2016. For each gallon of freshwater
we use in our operations, we return at
least that amount of freshwater back to
the environment where we work and live
through conservation projects that restore
streams and aquatic habitats."
Since 2014, the company says it has
completed 10 water conservation projects
across several states, including stream
channel and habitat restoration, waterway
and floodplain improvements, wetland
creation, and aquatic habitat restoration.
The most recent project, completed
earlier this year, is helping restore the
Cheat River's Muddy Creek watershed
in West Virginia, which had been severely
impaired by third-party acid mine drainage
unrelated to shale gas development or
Southwestern's operations.
Through an extensive freshwater pipe
network, the company delivers water for
all well completions throughout its 480,000
acres, which contain 1,100 gross producing
wells and 3,200 potential drilling locations.
The water supply system has helped remove 1.3 million truckloads of water off
roadways since inception while improving
well economics, Way noted in an Oct. 24
earnings call.
The benefits of piped water, direct
sourced sand and operational execution
improvements are integral ingredients to
lower drilling costs in longer laterals with
consistent estimated ultimate recoveries,
says Clay Carrell, chief operating officer.
Continuous Improvements
"Our teams keep expanding our 'continuous improvements' culture as they
keep finding ways to enhance well performance, lower costs and improve efficiencies," Carrell stated on the October
earnings call. "The performance bar keeps
going up quarter over quarter and our organization embraces that approach."
Southwestern's operations team is
pushing lateral lengths farther, to an average of 10,466 feet in the third quarter
at a cost of $784 per lateral foot throughout
Appalachia, besting an annual target of
$875, Carrell relates.
Lateral lengths on wells to sales increased 35%, as the company successfully
drilled 13 ultralong laterals beyond 15,000

feet through the first three quarters of
2019, he points out. Record laterals
include one drilled to 18,015 feet in what
the company calls its Southwest Appalachia super-rich and rich gas area in
southwestern Pennsylvania and northern
West Virginia, and another to 18,683 feet
in its Northeast Appalachia dry gas area
in northeastern Pennsylvania.
Southwestern holds almost 300,000
acres in its Southwest Appalachia Division
area with 7.6 trillion cubic feet equivalent
of proved reserves (45% gas, 46% natural
gas liquids, and 9% oil) as of year-end
2018, the company reports. Its 2019 estimated production in this area is 833
million cubic feet equivalent a day. Condensate production increased 42% to
15,400 barrels a day in the third quarter
compared with the same quarter in 2018,
he reports, with liquids production making
up 22% of total third quarter production
of 202 billion cubic feet equivalent.
According to the company, the Northeast Appalachia Division, where Southwestern holds almost 200,000 acres, contained 4.4 Tcf of proved reserves, 100%
gas as of year-end 2018. Its 2019 estimated
production is 1.2 billion cubic feet of
natural gas a day.
The company has begun to see production benefits in the Northeast from
pad compression installations, he says.
"We experienced an initial gross produc-

tion uplift of 55 MMcf/d from 10 installations," Carrell states. "We expect to
continue this program across more of the
asset and see a shallowing of the base
decline as a result."
Southwestern set a new company completions record in the third quarter, averaging 12 stages a day on a four-well pad,
an improvement that reduced well costs
on the four wells by $575,000 each and
reduced times to completion by 16 days,
he says. Through the first nine months of
2019, Carrell reveals, the company averaged 7.8 completion stages a day, an improvement better than 45% compared
with all of last year (Figure 1).
Environmental Stewardship
Along with its ongoing operations success, Carrell emphasizes, environmental
stewardship will remain a core value at
Southwestern. Noting that the company is
a member of the Our Nation's Energy
Future coalition of companies dedicated
to reducing methane emissions across the
natural gas value chain, he says Southwestern continues to implement technologies
and programs to methodologically eliminate
those emissions. That effort includes reduced
emission completions, pneumatic device
replacement, liquids unloading mitigation,
and leak detection and repair programs.
Last year, the company's greenhouse
gas intensity of 0.46 metric tons of carbon

FIGURE 1
Southwestern Energy Operational Results
And Records Achieved in Third Quarter
Footage Drilled (ft/day)

29%

6%

Increase

Decrease

Completed Stages (stages/day)
2,172(1)
1,700

1,505
1,165 1,102

1,248
1,045

70%

88%

Increase

Increase

2018(2)
Southwest Appalachia

2019E

SWN Record

2017

Northeast Appalachia

47%

Increase

Increase

7,451
6,185

7,267 7,584

2018
Southwest Appalachia

2018

2019E

SWN Record

Northeast Appalachia

Facilities Installation (days)
18,015

18,683
65

72%

70%

Decrease

Decrease

10,700
9,100
27
10

2017

5.2 5.5

Southwest Appalachia

Lateral Length (ft)

44%

11.4

7.8 7.5

1,036
4.6 4.0

2017(2)

12.0(1)

2019E

SWN Record(1)

Northeast Appalachia

2017

18
6
2018
Southwest Appalachia

3
2019E

2

1

SWN Record

Northeast Appalachia

NOTE: All percentage improvements compare 2019E to 2017.
(1) New record achieved in third quarter of 2019.
(2) Excludes some delineation wells.

NOVEMBER 2019 47
American Oil and Gas Reporter - November 2019

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