Range Resources: Dry Utica, Super Shale Potential
 Click Image for Larger Version
USGS Utica Potential With Range Overlay
 Click Image for Larger Version |
Using Range's map to the left, and assuming 4 wells/sq mile (160
acre spacing), and 20 BCF/well, the area within the blue outline
works out to a theoritical resource potential of approximately
400 TCF. The spacing is a general estimate, which means
that along with the BCF per well and area numbers, the spacing
assumptions are all
preliminary and subject to change as Utica wells are drilled and
placed on production.
Some items to note. First, it is our view that the southern and northeastern
boundaries of the southern dry Utica play are not yet fully defined,
so it is
possible that as additional wells are drilled in those areas,
the play boundaries could be pushed further to the south and to
the northeast. This is consistent with the USGS map,
published in 2012, on the possible extent of the high potential
parts of the Utica. Also, the 20 BCF/well is based on
estimates listed in the
July 9, 2015, Rice Energy presentation for its wells, which
are close to the western boundary of the play, so it is possible that as
the industry gains production experience with the dry Utica, we
may see changes in the estimates for average per well recovery. Finally,
Range references the "Point Pleasant" on its map, which many
observers, us included, view as part of the Utica.
Range uses
IP per 1000' of horizontal lateral as the contour
metric. To give some context as to what these values mean, one
can look to the Marcellus where the wells are frequently around 2-4 mmscfpd/1000' of lateral.
Per the Range map, the best
Utica areas are clocking in at about 10-11 mmscfpd/1000'.
However, it is worth noting that the
Scott's Run well had an IP of over 22 mmscfpd/1000'.
We
believe one of the practical implications of this mega-find
(keep in mind, as mapped by Range, it is considerably bigger than
the
much discussed gas discovery announced by ENI for
deepwater Egypt, and which some are toting as the biggest
discovery of the year) is that we believe it increases the
likelihood that the DOE and FERC will approve additional US LNG
export projects.
Also intriguing is that some
of the best parts of the Utica (and Marcellus, for that matter)
could literally be under Pittsburgh. One expects that the Steel
City might be able to make use of some of the cheapest energy in
the world. This is especially the case as one of its main manufacturing
competitors, Germany's Ruhr Valley,
has some of the most expensive energy in the world. |