Indiana County Marchand Unit

Does anyone have an update on the Marchand Unit in North Mahoning Township.  One unit is producing and four additional permits are on the books.

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Permalink Reply by Harpo on March 22, 2018 at 12:13pm

Longer laterals is the new norm for all the Shale Plays, as CNX notes in their last presentation in the CPA Area of the Marchand Well, they expect 3.5 Plus BCF/1000'lateral drilled, 7500' x 3.5 = 26.25 BCF potential reserves. The only thing that limits the length of the laterals is the company's acreage position . The Marchand Well Production/spacing Unit is only 172.58 acres, 330' from each side of the well bore. If the well is any good I would expect 6 to 12 wells drilled on the pad, spaced about 1000 feet apart, drilled in a south eastern direction (as the Marchand) and north western direction. Hopefully CNX will do a press release on the production results in the near future.  Pipeline capacity and Price must improve to spur development. 

Permalink Reply by farmgas on March 22, 2018 at 12:47pm

Sounds like a super sized well pad as recently projected for  future well pads.   CNX did mention the need to develop take away pipeline capacity in the CPA region.   Northern Indiana County would benefit greatly from more pipelines.  Price doesn`t seem to be increasing at a higher or steady rate right now.

Permalink Reply by Spike's Kin on March 23, 2018 at 4:50am
The one Shale play and place that continued low natgas prices and short laterals might work out profitably enough to spur growth is the Dry Utica >3.5/bcf EUR, just as CNX is attempting here with Marchand 3M. But without a separate parallel transmission line, or throttling it way back with chokes, the volumes and pressures (8500-10,000 psi initially) can cause everyone else to shut in their operations. Strategic reason to do this where there isn't sufficient takeaway might be to tank the market for stripper well operators (Central PA has more than a few) in order to pick up their HBP leases, could be another way of looking at it--is this also a squeeze play?
Permalink Reply by farmgas on March 25, 2018 at 6:41am

What exactly is a stripper well?  Is a stripper well just a vertical well only?  Who is drilling these wells?  XTO has two new Utica well permits near Trade City with 13,000' + planned laterals.   Both will be positioned near the DTI pipeline.   Is there a line pressure limit for this pipeline?

Permalink Reply by Harpo on March 25, 2018 at 7:17am

Per the IRS: a "stripper" gas well is defined by the Interstate Oil and Gas Compact Commission as one that produces 60,000 cubic feet (1,700 m3) or less of gas per day at its maximum flow rate; the Internal Revenue Service, for tax purposes, uses a threshold of 90,000 cubic feet (2,500 m3) per day.

Permalink Reply by farmgas on March 25, 2018 at 7:25am

This sounds like most conventional wells fall into this category.  If so, how would a few Utica wells in Northern Indiana County impact the flow from so may older shallow wells?   Wouldn`t this cause a problem for the sale of these wells to Diversified Oil & Gas by CNX and Alliance Petroleum?

Permalink Reply by Spike's Kin on March 25, 2018 at 9:58am
Nobody I know about is still actively drilling conventional/stripper wells. But it should go without saying, there are tens of thousands of legacy wells yet producing gas, some for 80 years or longer. They're what holds most land by production-- what value these companies have in a $3/mcf and under environment isn't so much the low-volume low pressure gas but the value of leases held by production in a sale to a Marcellus or Utica player. Somewhat puzzling how any of these bit players in Armstrong, Indiana, Jefferson are still standing with basis differentials we've seen until quite recently.
Permalink Reply by farmgas on March 25, 2018 at 10:10am

I understand the value of a Super Utica well to the major gas companies and why conventional wells hold a lease by HBP.  What happens when a major gas company like XTO or CNX for example sells off the shallow wells?  Doesn`t that sale release the HBP status of the lease?   Do they retain deep gas rights, and if so, how does that work?  Do you have two leases from two different companies?  What if the shallow gas buyer doesn`t keep the wells producing?   Is the lease terminated for the deep gas holder?

Permalink Reply by Harpo on March 25, 2018 at 11:00am

Major players like CNX/XTO, etc, are selling their shallow wells, but reserving all leasehold O & G rights below deepest depth drilled or under certain zones/depths. Both shallow & deep rights owners are subject to the same terms & conditions of the applicable O & G Lease. If shallow owner does not maintain leasehold production in paying quantities or what ever the lease says, the O & G Lease could be terminated and deep rights terminated. 

Permalink Reply by farmgas on March 25, 2018 at 11:16am

Thanks Michael - what assurance(s) do the deep gas rights owners have that shallow gas rights owners will maintain the wells & production?   After all, many of these wells are old and could qualify for being plugged.  It sounds like a potential problem for the deep gas rights owners.  If the lease expires because of the action or inaction of the shallow rights owner the deep gas owner may then have to resign a new lease and pay bonus money. 

Permalink Reply by Harpo on March 25, 2018 at 11:27am

No assurances , but most require production records, proof of royalty payments, etc . There are many marginal wells in our area holding leaseholds .  New Leases will be needed is some cases. 

Permalink Reply by farmgas on March 25, 2018 at 2:26pm

Michael - it sounds like you are from the norther Indiana County area.  Is that correct?  I have a lease with CNX within 7 miles of the Marchand pad, and I look for any information about activity to drill or build new pipelines in that area.  I think this Utica well on the Marchand pad will be a big deal for our area.  Pipeline takeaway capacity still seems to be a problem.  Have you been following the XTO Winslow Utica well activity?  Any news for it yet?  The two Utica well permits issued to them near Trade City is a good indicator of their satisfaction with our area.

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