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Chesapeake Energy Raises Marcellus Shale Production Estimates By 24 Percent
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Chesapeake Energy Corporation provided an update on its operational activities. For the 2010 second quarter, daily production averaged 2.789 billion cubic feet of natural gas equivalent (bcfe), an increase of 203 million cubic feet of natural gas equivalent (mmcfe), or 8 percent, above the 2.586 bcfe produced per day in the 2010 first quarter and an increase of 336 mmcfe, or 14 percent, over the 2.453 bcfe produced per day in the 2009 second quarter.
Chesapeake's average daily production of 2.789 bcfe for the 2010 second quarter consisted of 2.497 billion cubic feet of natural gas (bcf) and 48,670 barrels of oil and natural gas liquids (NGLs) (bbls). The company's 2010 second quarter production of 253.8 bcfe was comprised of 227.2 bcf (90 percent on a natural gas equivalent basis) and 4.4 million barrels of oil and NGLs (mmbbls) (10 percent on a natural gas equivalent basis).
The company's year-over-year growth rate of natural gas production was 11 percent and its year-over-year growth rate of oil and NGLs (liquids) production was 41 percent. The company's percentage of revenue from liquids in the 2010 second quarter was 17 percent of realized production revenue compared to 14 percent in the 2009 second quarter.
Chesapeake is projecting full-year production growth of approximately 13 percent in 2010 and 18 percent in 2011, including production growth from liquids of approximately 60 percent in 2010 and 80 percent in 2011. Of Chesapeake's projected 13 percent and 18 percent growth rates in 2010 and 2011, approximately 37 percent and 50 percent, respectively, of the growth is projected to come from increased liquids production.
Marcellus Shale Update In WV, PA, NY
With approximately 1.55 million net acres, an increase of approximately 50,000 net acres from the 2010 first quarter, Chesapeake is the largest leasehold owner, second-largest producer and most active driller in the Marcellus Shale play that spans from northern West Virginia across much of Pennsylvania into southern New York.
On its Marcellus leasehold, Chesapeake estimates it has approximately 460 bcfe of proved reserves (based on the 10-year average NYMEX strip prices at June 30, 2010) and 34.1 tcfe of risked unproved resources. As a result of continued strong production results, the company has recently raised its average estimated ultimate recovery (EUR) on its Marcellus Shale acreage by approximately 24 percent from 4.2 bcfe per well to 5.2 bcfe per well.
During the 2010 second quarter, Chesapeake's average daily net production of 105 mmcfe in the Marcellus increased approximately 65 percent over the 2010 first quarter and approximately 250 percent over the 2009 second quarter. The company's average daily net production rate in the Marcellus in July 2010 was approximately 130 mmcfe and the company anticipates adding more than 60 mmcfe of net production in the West Virginia portion of the play in the second half of 2010 once new natural gas processing facilities become operational.
Chesapeake is currently drilling with 26 operated rigs in the Marcellus and anticipates operating an average of approximately 28 rigs in 2010 to drill approximately 150 net wells. During the 2010 second quarter, Chesapeake received approximately $144 million of drilling and completion carries from its Marcellus joint venture partner Statoil (NYSE:STO, OSE:STL). From July 2010 through 2012, Chesapeake should receive approximately $1.7 billion in additional drilling carries from STO.
Three notable recent wells completed by Chesapeake in the Marcellus are as follows:
-- The Mowry 1H in Bradford County, PA achieved a peak 24-hour rate of 9.9 million cubic feet of natural gas (mmcf) per day;
-- The Przybyszewski 4H in Susquehanna County, PA achieved a peak 24-hour rate of 9.7 mmcf per day; and
-- The White 2H in Susquehanna County, PA achieved a peak 24-hour rate of 9.0 mmcf per day.
The complete quarterly update is available online.
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8/9/2010 |
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