American Oil and Gas Reporter - August 2023 - 51

SpecialReport: Natural Gas Playmakers
In one week in late June and early
July, 27 LNG vessels carrying 100 billion
cubic feet of gas left U.S. terminals in
Louisiana and Texas, according to the
U.S. Energy Information Administration.
Growing global demand and new capacity
coming on line next year at the Golden
Pass LNG facility at Sabine, Tx., and the
Venture Global LNG terminal at Plaquemines,
La., will further add baseline demand
for domestic gas, boosting projected
daily LNG exports from 12 billion cubic
feet a day to 13.3 Bcf/d in 2024.
Appalachia To The Rockies
Appalachia producer Greylock Energy
is leveraging its gas position to diversify
its hydrocarbon mix and geographical
footprint after a 2022 acquisition in the
western Rockies, says Chief Executive
Officer Kyle Mork.
" We remain active in the acquisitions
market, " Mork says. " We generally look
at anything and everything in Appalachia
and in the western Rockies, but we continue
to be open to opportunities outside
those areas and have looked at several
deals in other basins. "
The Charleston, W.V.-based, company
last year acquired 1,400 producing, mostly
vertical wells on 290,000 gross acres in
Utah's Uinta Basin and Wyoming's Green
River Basin. The assets boosted daily production
by 50%, including a 2,000% increase
in oil production. Still, natural gas accounts
for some 90% of the company's output.
The move also allowed Greylock to
take advantage of better differentials,
Mork continues. While differentials in
Appalachia trade at a discount to Henry
Hub, western Rockies gas has been trading
at a premium this summer, he points out.
Although Greylock will not have capacity
on Mountain Valley Pipeline, the
added takeaway should have a positive
impact on basin differentials across the
Appalachian Basin, Mork observes. The
announcement of the provision to complete
MVP influenced moves in the futures
market of $0.10/MMBtu for Appalachian
gas, he says.
" With MVP coming on line, I do not
think it will fundamentally change things
to the extent that we are suddenly going
to get the equivalent to Henry Hub, as
much as I would love that, but I do think
it is going to be a net positive for us, "
Mork assesses.
Several Rockies recompletions are being
performed this year, including tapping
into zones behind pipe, in preparation
for an accelerated development program
next year, he says.
After the acquisition, Greylock's assets
consist of 1.2 million acres, 6,700 wells,
and 2,600 miles of pipeline, with much of
its Appalachian production-which includes
vertical production-coming from about
100 Marcellus wells in Greene County, Pa.
Drilling will continue in Greene County
while the company prepares for potential
development in other areas of Appalachia.
Greylock continues to maximize lateral
lengths where it can, averaging 8,5009,000
feet this year, with averages dictated
by lease configurations, Mork details.
" We have drilled several wells with laterals
over 10,000 feet long and certainly
see the benefit with increased estimated ultimate
recoveries pretty much in linear
fashion with lateral length, " he remarks.
" But in Appalachia, it is just a little different
ballgame because of how leases work here. "
Although Greylock continues to experiment
with sand concentrations and
loadings, Marcellus completion designs
in Greene County have remained fairly
consistent. Mork says 2,500 pounds of
proppant per lateral foot is the sweet spot
for stage spacings of 200 feet. The company
has seen continued progress on surface
logistics, including moving water and sand
and frac crew design and rig up.
Midstream has been a major focus
over the past few years, Mork notes, with
recent opportunities including arrangements
to supply gas to large manufacturers
in the region.
Appalachian Powerhouse
Adding to the growing global market
for natural gas, the approval of the last
segment of the MVP pipeline system via
the Fiscal Responsibility Act will add 2
Bcf/d of much-needed takeaway capacity
out of the Appalachian Basin, allowing
operators to collectively boost daily production
to as much as 37 Bcf/d. Moreover,
the summer heat has contributed to increased
natural gas power burn, resulting
in less-than-anticipated weekly injection
rates into gas storage through mid-summer
and helping Henry Hub prices climb from
springtime lows.
Additional takeaway capacity from
MVP is indeed welcome, but Appalachia
could supply a lot more natural gas, says
Toby Rice, chief executive officer of Pittsburgh-based
EQT Corporation, the nation's
largest gas producer.
An ardent promoter of the potential
of natural gas through EQT's Unleash
U.S. LNG campaign, Rice insists substantially
more pipeline infrastructure
will help the United States realize the
full potential of the Marcellus Shale, a
green energy resource.
It is one of the world's biggest decarbonization
opportunities, he says.
Appalachia-based Greylock Energy LLC is leveraging its gas position to diversify its hydrocarbon
mix and geographical footprint after a 2022 acquisition in the Uinta and
Green River basins. The company is performing recompletions in the Rockies this year
in preparation for an accelerated development program, and continues its Marcellus
long-lateral drilling program in Greene County, Pa.
AUGUST 2023 51

American Oil and Gas Reporter - August 2023

Table of Contents for the Digital Edition of American Oil and Gas Reporter - August 2023