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CONSOL Energy Provides Latest Marcellus Shale Well Results; Acquires Nearly 90,000 Acres With Marcellus Shale And Upper Devonian Potential

Stocks in this article: CNX

PITTSBURGH, Dec. 10, 2013 /PRNewswire/ -- CONSOL Energy Inc. (NYSE: CNX), a leading Appalachian natural gas producer, is providing an update on Marcellus Shale well results from several CONSOL-operated drilling pads in Washington County, Pa. The eleven wells on three pads had an average lateral length of 5,300 feet and were completed with some combination of shorter stage lengths, reduced cluster spacing, and other enhanced production techniques. Initial production from the wells averaged 10.7 MMcfe per day, and ranged from 5.3 MMcfe to 18.4 MMcfe per day. While EURs 1 have yet to be calculated for these wells, the company believes they should easily approach 2.0 Bcfe per thousand lateral feet. The wells were turned into line quickly after flowing back frack fluids.

(Logo: http://photos.prnewswire.com/prnh/20120416/NE87957LOGO )

Separately, in Barbour County, W. Va., CONSOL has recently completed its first pad, the six-well Philippi 13 pad, that employed the same short stage lengths, reduced cluster spacing, and enhanced production techniques with positive early results.  Drillout and flowback activities are ongoing but the first well, PHL 13F which is 8,733 feet in lateral length, recently went into production with a maximum 24-hour flow rate of 13.6 MMcfe per day.

"While CONSOL Energy has experimented with various components of enhanced completion and production techniques over the past 18 months, these wells represent the first large-scale application," commented J. Brett Harvey, chairman and CEO. "These results are a splendid example of one of our core values – continuous improvement – that we strive for in all areas."

For the company's 2014 Marcellus Shale program, CONSOL Energy intends to make extensive use of these enhanced completion and production techniques.

In addition to providing well results, CONSOL Energy has acquired the gas drilling rights to nearly 90,000 contiguous acres from Dominion Transmission, a unit of Dominion Resources. The majority of the acreage, which is associated with Dominion's Fink-Kennedy, Lost Creek, and Racket Newberne gas storage fields in West Virginia, lies in the northern portion of Lewis County and the southern portion of Harrison County. CONSOL anticipates that over one-half of the acres will have wet gas.

CONSOL Energy has acquired the gas rights to both the Marcellus Shale and the Upper Devonian formations in the storage fields. A total gross consideration of up to $190 million will be paid in two installments – approximately 50% paid at closing last week, with the balance due over time as the acres are drilled. CONSOL has also committed to be an anchor shipper on Dominion's transmission system.

"This transaction reinforces CONSOL Energy's commitment to being a leading natural gas producer in the Appalachian Basin," continued Mr. Harvey. "These parcels represent what could be the largest untapped contiguous acreage in the southern core of the Marcellus Shale. They complement our already significant acreage position in Northern West Virginia. As CONSOL Energy accelerates its gas drilling in the next few years, and continues to improve its efficiency through enhanced production techniques, we believe this transaction could provide us with more than 350 risked long lateral Marcellus Shale drilling locations."

Noble Energy, CONSOL Energy's joint venture partner in the Marcellus Shale, is exercising its right to participate at a 50% level in this transaction.

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