Appalachian Basin operators are adjusting plans and growth forecasts in today’s environment of low oil and gas prices. Operators in the Marcellus and Utica are reducing capex spending by deferring completions on horizontal boreholes.

One of the largest operators in the region, Consol Energy Inc. (NYSE: CNX), is reducing its spending forecast as the company intends to spend most of 2016 working through its inventory of drilled but uncompleted wells (DUCs) in the Marcellus play. Consol plans to complete 25 of the 83 wells already drilled.

As a result of working through its backlog of DUCs, the company expects oil and gas volumes to rise this year to about 1.3 billion cubic feet equivalent per day (Bcfe/d), up from 2015 production of around 900 MMcfe/d.

Reduced production is also affecting the State of Pennsylvania’s coffers. The state forest department reported that royalty and rent income from July-December 2014 was $68.3 million compared to $36.7 million over the same six months in 2015.

The money has been used in recent years to both operate and improve Pennsylvania state-owned parks and forests, although its diversion to the Department of Conservation and Natural Resources is the subject of a court challenge.

Marcellus, shale, connect series, Hart Energy, Larry Prado, activity highlights, Appalachian Basin, Consol, DUCs, oil, gas, Southwestern, energy, Rex, Magnum Hunter, Seneca Resources

1. Southwestern Energy: 2/3/16

Houston-based Southwestern Energy Co. (NYSE: SWN) announced results from two Tioga County, Pa., Marcellus Shale completions.

The #2H Kohler flowed about 5 MMcf/d during a two-week period. It was drilled to 12,925 feet, 7,247 feet true vertical. Additional information is not available.

In Section 6, Nauvoo 7.5 Quad, Liberty Township, #6H Lepley was tested flowing 5 MMcf/d during a two-week period from a 1,822-foot lateral. The planned depth was 14,087 feet and the planned true vertical depth was 6,920 feet.

Southwestern also continued the delineation of its acreage at #3H Colwell North in Susquehanna County. It initially produced 4 MMcf/d without compression, according to the company. The Marcellus Shale well was drilled to 13,093 feet and the true vertical depth was 5,486 feet.

2. Southwestern:10/8/15

Southwestern Energy has scheduled two Marcellus Shale tests in Tioga County, Pa.

The #3H and #4H Fall Creek A will be horizontally drilled from offsetting surface locations in Section 2 Nauvoo 7.5 Quad, Liberty Township.

The #3H Fall Creek has a planned depth of 14,442 feet, 6,832 feet true vertical, after a 6,997-foot vertical pilot hole is drilled. The #4H Fall Creek has a planned depth of 15,142 feet, 6,828 feet true vertical, after drilling a 7,001-foot vertical pilot hole. Each Marcellus Shale lateral will bottom about 1.5 miles to the southeast.

Southwestern holds the drilling rights to 312,000 net acres in northeastern Pennsylvania and plans to drill about 90 operated horizontal wells in the region.

3. Rex Energy: 9/8/15

Rex Energy Corp. (NASDAQ: REXX) has tested the two wells drilled from the Renick pad in the company's Moraine East area Butler County, Pa.

A Marcellus completion, #2H Renick, has about a 6,000-foot lateral and was completed in 40 stages. According to IHS, it produced 6.6 MMcfe/d, comprised of 3 MMcf of gas, 566 barrels (bbl) of NGL and 47 bbl of condensate.

A Burkett Shale completion, #3H Renick, has a 5,700-ft lateral and was completed in 38 stages. It produced about 8.2 MMcfe/d, comprised of 3.5 MMcf of gas, 675 bbl of NGL and 101 bbl of condensate.

State College, Pa.-based Rex Energy's liquids-rich Moraine East acreage consists of about 24,000 net acres in Butler County. In addition to the Renick pad, Rex Energy operates the Fleeger and Gray pads to the west.

4. Seneca Resources: 7/9/15

Two horizontal Marcellus Shale wells have been permitted by Seneca Resources Corp. in Elk County, Pa.

At #51760-51H PA Timber LP, a 6,283-foot vertical pilot hole will be horizontally drilled to 12,799 feet, 6,288 feet true vertical. The venture is slated to bottom about a mile to the southeast.

A second horizontal drillsite is planned for an offsetting surface location. The #51766-57H PA Timber LP has a planned depth of 14,891 feet, 6,945 feet true vertical, and will bottom just over a mile to the northwest.

The Houston-based company's horizontal tests are along the western edge of Rocky Run Field, an Upper Devonian gas field operated by the company.

Most of the wells in the field yield gas at depths of around 1,600 feet to 1,800 feet. Marcellus Shale gas production is about four miles to the northwest at #1H and #2H HMI Pat Warrant in Ridgway Field.

5. Rex Energy: 5/1/15

Rex Energy has completed drilling its first production well in its Moraine East license area in Butler County, Pa.

Preliminary analysis from the Appalachian Basin well, #5HRenick, indicates that the Moraine East Area's reservoir and geological characteristics are similar to the legacy Butler Operated Area.

The well had a projected depth of 11,370 feet, a planned true vertical depth of 5,520 feet, and is in Section 6, Mount Chestnut 7.5 Quad, Center Township.

The State College, Pa.-based company will complete drilling from the four-well Renick pad by mid-2015. Current plans are to drill 10 to 16 wells in the Moraine East Area and complete four to 10 wells in 2015.

In the Butler operated area, the company intends to place into sales 11 Marcellus Shale wells during the first quarter. Rex is the operator of the Moraine East and Butler licenses with 70% interest.

6. Rex Energy: 1/20/15

Rex Energy announced results from a Butler County, Pa., Marcellus Shale test, #1H Reno.

The horizontal well was placed into sales and had an average five-day rate of 10.6 MMcfe/d with 38% liquids (assuming full ethane recovery). The total depth was not announced.

The well is producing from a 4,150-foot lateral and was completed in 28 stages.

The Butler, Pa.-based company also announced results from its nearby, five-well Ferree pad. The company’s second test of a stacked Upper Devonian Burkett/Marcellus was placed into sales in late 2014.

The five wells on the pad were drilled with an average lateral length of 5,500 feet and completed with an average of 33 stages. The wells produced at an average five-day sales rate per well of 8.3 MMcfe/d with 55% liquids (assuming full ethane recovery).

Preliminary analysis does not indicate any communication between the Upper Devonian Burkett and Marcellus Shale. The company continues to monitor the effects of the stacked laterals.

7. Magnum Hunter: 8/15/14

According to IHS Inc., Magnum Hunter Resources Corp. and EM Energy Ohio LLC have formed a partnership to jointly develop Marcellus and Utica shale acreage in Washington County, Ohio.

Terms of the new agreement include Magnum Hunter subsidiary Triad Hunter LLC and EM Energy collectively working together within the contract area on the Merlin and Haynes pads in Washington County. The Merlin pad includes 620 acres in Washington County.

The #8PPH Merlin and #10PPH Merlin will be drilled from offsetting surface locations. Following the drilling of separate 8,300-foot vertical pilot holes, #8PPH Merlin will be horizontally drilled to 14,500 feet while #10PPH Merlin will reach 15,560 feet. Each planned Utica Shale venture has about a 1.5 mile long lateral.

The companies expect to begin drilling in late 2014 on the planned Haynes pad, which includes about 460 acres—one Marcellus Shale test and a deeper Utica Shale well are initially planned.

Houston-based Magnum Hunter’s Appalachian Basin acreage includes 106,000 acres prospective for Utica Shale and another 79,000 acres for Marcellus Shale.

Larry Prado can be reached at lprado@hartenergy.com.