American Oil and Gas Reporter - July 2016 - 65

SpecialReport: Horizontal & Innovative Drilling
Valley Connector transmission line, which
connects to the Rockies Express Pipeline
that takes gas to the Midwest. EQT and a
number of other companies are in the
permitting process to build the Mountain
Valley Pipeline, which will take gas to a
number of industrial customers and gaspowered electric plants being built in the
Southeast, he adds.
Schlotterbeck acknowledges a number
of challenges to operating in the Northeast,
especially during an economic slump.
"Maintaining a strong balance sheet
and keeping your people motivated is a
challenge," he allows. "We have been
fortunate that we have had no layoffs.
"From an operational standpoint," he
goes on, "one of the biggest challenges
is putting together a lease that allows us
to drill a long lateral. This then begs another problem, which is antiquated state
regulations."
For example, in West Virginia, 100
percent of the heirs must agree to a lease
before a well can be drilled. "There can
be hundreds of owners to a single lease,
which is a huge challenge," Schlotterbeck
muses.
He says he believes continued innovation and finding ways to drill better
and cheaper will drive the industry in the
future. It is that innovation that has led to
the surge of Marcellus and Utica development.
Record Production
Drilling in both the Marcellus and
Utica, Denver-based Antero Resources
reported average net daily gas production
of 1.758 billion cubic feet equivalent (23
percent liquids) in first quarter 2016, an
18 percent year-to-year increase and a
17 percent increase over fourth quarter
2015. Average net liquids production was
a record 68,561 barrels a day, a 71 percent
increase over the prior year and a 25 percent increase sequentially.
"We had an excellent quarter operationally, once again achieving record production while also reducing well costs
16-19 percent from 2015 levels," Chairman
and Chief Executive Officer Paul Rady
says in the company's first-quarter operations update. "These lower well costs
were the result of continued operational
efficiencies and our ability to restructure
a number of service contracts.
"Reducing well costs has been a high
priority for Antero over the past 18
months, as it provides us with another
lever to improve economics and drive

Seneca Resources Corp. has drilled and completed its first Utica/Point Pleasant horizontal well in the Clermont, Pa., area. The relatively short (4,500-foot) Utica/Point Pleasant
lateral was drilled on a pad with other longer-lateral Marcellus wells, and will be brought
on line later this summer when all the wells on this pad are completed.

value," Rady continues. "We also have
locked in attractive product prices with
our industry-leading hedge book and continue to realize improved pricing through
our firm transportation portfolio."
Antero reported its realized natural
gas price before hedging averaged $2.08
an Mcf, a mere 1-cent differential to
NYMEX. Its realized hedged-gas price
averaged $4.54 an Mcf, a $2.45 premium
to NYMEX. The company reported a realized C3+ NGL price before hedging of
$14.07 a barrel, which is 42 percent of
West Texas Intermediate. Its realized natural gas equivalent price, including NGLs,
oil and hedges, averaged $4.14 an Mcfe.
First quarter 2016 was the first full
quarter that the Stonewall gathering
pipeline was in service, which, according
to Rady, resulted in Antero selling 99
percent of its gas to favorably priced
markets, including TCO, Chicago, MichCon, TGP and NYMEX.
He says Antero completed and placed
19 horizontal Marcellus wells on line
during the first quarter with an average
lateral length of 8,000 feet. Of those 19
wells, 15 had 30-day average rates of
17.6 MMcfe/d, assuming ethane rejection
(22 percent liquids). Antero reports it is
completing wells with approximately 25
percent higher fluid volume and proppant
loading, and is operating seven drilling
rigs and four completion crews in the
Marcellus Shale.
Antero also reports placing 13 horizontal Utica wells on line in the first
quarter. Average lateral length was 8,500

feet, and the eight wells that had been on
line for more than 30 days had average
restricted 30-day rates of 14.1 MMcfe/d
while rejecting ethane (14 percent liquids).
In addition, the company says it completed the Fogle Unit 1H well in Noble
County, Oh., with encouraging early results. This well represents the most southerly location drilled to date on Antero's
Utica acreage.
Reducing Footprint
Rob Boulware, stakeholder relations
manager for Seneca Resources Corp.,
admits these are challenging times in the
Marcellus and Utica plays, with significant
reductions in rig counts, capital spending,
and workforce allocations.
"We began the year with three rigs,
and dropped to a single rig as of March,"
he reveals. "Reduced drilling, combined
with getting a partner to fund a large
portion of this year's program, has enabled
us to live within cash flow. Our current
plans allow us to stay at a single drilling
rig for at least a year before we need to
again ramp up drilling and completion
activities in order to have enough production to fill the pipeline capacity that
will come on in November 2017-the targeted completion date of our Northern
Access Pipeline."
Boulware adds that Seneca has reduced
its completion crew activity to daylightonly operations. That means the company
typically can complete five-six stages a
day, which allows it to recycle all its proJULY 2016 65

American Oil and Gas Reporter - July 2016

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