28 Feb Range Resources 2012 Capital Plan, Announces More Marcellus Drilling
Range Resources released its 2012 capital budget and operating plans, announcing that they are forging ahead with Marcellus drilling, particularly in the southwestern Pennsylvania. Range also plans to reduce dry gas drilling, meaning that there will be less activity in Southwestern PA.
According to the report, the budget is set at $1.6 billion, and includes $1.3 billion for drilling and recompletions, $215 million for leasehold, $47 million for seismic and $73 million for pipelines and facilities. Approximately 75% of the budget will be targeted toward liquids-rich and oil projects predominately in the Marcellus Shale and horizontal Mississippian plays. As a result of its capital program, Range has increased its 2012 production growth target to 30 – 35%.
Range estimates project drilling returns in core areas, with drilling returns expected to generate an estimated 27 – 99 percent. Capital spending for dry gas projects, concentrated in northeastern Pennsylvania, was reduced to 25 percent of the budget.
The report cites “significant progress made on multiple fronts” from their 2001 Marcellus division. Development in the southwest area has been increased, which is referred to as their “super-rich” area, where to date Range has drilled and completed a total of eight wells, with production histories ranging from 7 to 24 months. The average estimated recovery of these wells is estimated to be 400 thousand barrels of liquids (95 thousand barrels of condensate and 305 thousand barrels of NGLs) and 3.9 Bcf of natural gas per well.
Range also addresses concerns over the “fracking” issue, the chemicals involved, and the effect it will have on the local population and environment. Below is the portion of Range’s 2012 Capital Plan, in which they discuss their plans:
“During the year, Range has helped to pioneer a number of best practices in the super-rich and wet gas producing areas in Appalachia working with stakeholders in the industry, academia, conservation and the regulatory community. This includes enhanced measures to reduce and eliminate potential impacts on health and safety, including air and water resources. Many of these efforts are aimed at reducing potential emissions and stray gas during all phases of development including drilling, completion, flow back and final production; including vapor recovery units, workplace and first responder training, increased set backs from hydrocarbons on location and enhanced equipment and facilities. Several steps have also been taken to protect water resources including advancements in spill containment and prevention plans, equipment and training.”