Marcellus Shale: CNX Gas Record Well Results

CNX Gas has come out and reported their drilling update on the Marcellus Shale.

CNX Gas Corporation ( CXG), the leading E&P company in the Appalachian Basin, reported that its first horizontal Marcellus Shale well is now producing at a rate of 6.5 million cubic feet (MMcf) per day. This is a record daily production rate for any well in the company’s history and is believed to be among the highest reported by any Marcellus Shale producer. The well, located in Greene County, Pa., began flowing into the sales meter on October 2, with an initial production rate of 1.2 MMcf per day and 4,000 pounds of backpressure, as previously reported. The backpressure on the well had been gradually reduced since then, allowing daily production to increase to about 4 MMcf per day until Friday, when the installation of new surface equipment enabled the well to flow at the 6.5 MMcf per day rate, with pressure still being held at 2,640 pounds. Cumulative production from the well prior to last Friday was 106 MMcf.

Nicholas J. DeIuliis, president and chief executive officer, said, “This was a team effort from our engineers, operators, and support personnel, including the directional drillers from Scientific Drilling and the hydraulic fracturing team from BJ Services. I can’t speak highly enough of our Marcellus Shale team.

“To achieve this kind of success with our first horizontal Marcellus Shale well,” Mr. DeIuliis continued, “speaks volumes about the breadth of our horizontal drilling expertise. Many investors may not be aware, but CNX Gas had drilled 160 horizontal coalbed methane wells before drilling its first horizontal Marcellus Shale well.”

The well was drilled to a vertical depth of 8,140 feet in the Huntersville Chert, penetrating 83 vertical feet of Marcellus Shale. The well was logged then plugged back and a horizontal section of 3,395 feet was cut for a total measured depth of 10,738 feet. The well was completed with a five-stage slickwater fracture treatment using 3 million pounds of proppant.

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CNX Gas ( CXG ) Operations Update 10/22/08

CNX Gas (CXG ) has come out with really good earnings this morning to kick off the earnings season for the Oil & Gas drillers.

In the Marcellus Shale during the third quarter, CNX Gas drilled its first and second horizontal wells in southwestern Pennsylvania. The first horizontal well cost $6 million and was stimulated with a five-stage slickwater frac. An open flow test was not conducted on this well. It came online October 2, and is producing 1.2 MMcf per day with 4,000 pounds of backpressure. The daily flow rate is expected to increase dramatically over the next few weeks as the backpressure is gradually eased. The nearby coalbed methane gathering system has the capacity to handle up to 2.5 MMcf per day from this horizontal well and is being expanded within the next two weeks to handle additional volumes.
Also," Mr. Albert continued, "the vertical Marcellus Shale well that we turned online in July 2008 is currently producing 450 Mcf per day. We believe that the well has some sand issues, and could return to a daily production rate of 700-800 Mcf after cleaning."
CNX Gas will keep one horizontal rig and one vertical rig running in the Marcellus Shale for the remainder of the year.

In the Chattanooga Shale, CNX Gas drilled three horizontal wells in the quarter, bringing the yearly total to seven, and the project total to eight. No wells were connected during the September quarter, although the fifth well was connected last week. The first four wells are seeing current daily production rates of 230, 160, 100, and 230 Mcf per day, for a total of 720 Mcf per day. The daily rates for the better wells have been stable.

In the Huron Shale during the third quarter, CNX Gas drilled one additional horizontal well in eastern Kentucky. A total of two Huron wells have been drilled in 2008. The rig performing this drilling has returned to Tennessee to drill Chattanooga Shale wells for the remainder of the year. CNX Gas is building out gathering and compression in this area, with an expected in-service date of March 2009.

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