Analysts: Marcellus has $90 billion left in value – Timesonline.com: Energy

An international energy, metals and mining industries analyst firm has concluded that the Marcellus shale has $90 billion in remaining value.

Wood Mackenzie also reported that the Marcellus formation is the largest shale gas play in the world, encompassing 30 million acres across four states. The firm said it anticipates the top 20 operators to drill 25,000 wells through 2035.

By comparison, Wood Mackenzie estimated in April that North Dakota’s Bakken and Three Forks formations, oil-rich plays, had a remaining value of $118 billion.

While the number of drilling rigs has decreased since early 2012, Wood Mackenzie said Marcellus growth is attributed to “improved efficiency and a renewed focus on the play’s core sub-plays.”

The firm said well results are improving because of longer laterals, part of horizontal drilling, and high-volume completions. Based on that, the firm said it was raising its forecast for production in 2020 from 14 billions of cubic feet per day to 20 billions of cubic feet per day.

Marcellus “will soon account for nearly 25 percent of total U.S. shale gas supply,” the firm said.

Wood Mackenzie said that drilling and completion costs usually range between $6 million and $9 million for each well in the Marcellus.

Over the last four years, drilling operators have gone from using 4 million gallons of water and 1 million pounds of sand per well to 10 million gallons of water and 13 million pounds of sand, or proppant, as its called in the industry. Sand use increased by 58 percent just between 2012 and 2013, the firm said.

Wood Mackenzie said that although the Susquehanna Core has the very productive dry gas wells “there is limited running room” and the “most near-term growth” is expected to come from the wet gas sub-plays in southwest Pennsylvania and West Virginia.

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via Analysts: Marcellus has $90 billion left in value – Timesonline.com: Energy.