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Gas well drilling technique pays off National Fuel says results are good news

National Fuel Gas Co. hit pay dirt with its first wholly owned horizontal natural gas well in the Marcellus Shale region in northwestern Pennsylvania.

The Amherst-based energy company said the test results for the first horizontal well drilled by its Seneca Resources subsidiary in the Marcellus Shale produced an average of nearly 6 million cubic feet of natural gas per day. That's two to three times the average yields National Fuel executives expect from the potentially high-producing wells in the region.

"It's obviously good news," said Julie Coppola Cox, a National Fuel spokeswoman. "It's a strong well and these are good results."

National Fuel executives, and officials from other energy companies, are investing heavily in the Marcellus Shale region in Pennsylvania and portions of the Southern Tier in New York in hopes of tapping into vast amounts of natural gas by using relatively new horizontal drilling technology.

While Cox cautioned that the production rates National Fuel reported on Tuesday for the well are only test results based on six days of operation, National Fuel officials also said the results are an encouraging sign that the company's Marcellus wells will eventually yield large quantities of natural gas.

The well, in Tioga County, is the first wholly owned well that National Fuel has drilled in the region. The company also is a half-owner of 12 horizontal wells in the region that were drilled through a joint venture with energy producer EOG Resources.

The four wells that the joint venture
has drilled in the region have been producing about 2.3 million cubic feet of gas per day, National Fuel previously has said. In all, National Fuel expects to spend between $113 million and $137 million during the fiscal year that begins in October to drill an additional 15 to 20 wholly owned horizontal wells in the Marcellus region. The joint venture with EOG is expected to drill about 20 wells in the next fiscal year.

National Fuel controls the drilling rights on roughly 720,000 acres in the Marcellus Shale region. That land could hold between 4 trillion to 8 trillion cubic feet of natural gas, National Fuel executives have estimated. That gas previously went untapped until the launch of new drilling techniques that allow the well to be drilled vertically and then horizontally, unlike a traditional well that goes straight down.

As a result, National Fuel officials believe the wells in the Marcellus Shale region have the potential to produce between 2 million to 3 million cubic feet of natural gas per day, far higher than the typical Appalachian well.


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