Nearly 1,600 Gas Wells Complete

MOUNDSVILLE – Since 2006, natural gas drillers have completed nearly 1,600 Marcellus Shale wells in West Virginia, with another 1,273 wells still in some stage of development.

However, low natural gas prices hovering around the $2 per unit level may cause Mountain State drillers to curtail operations, or shift their attention from methane-dominated dry gas areas to liquids-rich wet gas areas, such as Ohio and Marshall counties.

“We will continue to drill to hold leases, and will continue to drill in the wet gas. But there will be little if any drilling in the dry gas areas,” said Corky DeMarco, executive director of the West Virginia Oil and Natural Gas Association. “A slow down in drilling will allow us to focus more on getting our pipelines in place and processing plants up and running.”

Though DeMarco and other industry leaders see drilling slowing down across the Mountain State, the West Virginia Geological and Economic Survey shows that nearly 1,600 Marcellus wells have been drilled and completed in the state since the beginning of 2006.

“Completed means that the wells have been drilled, fracked and are capable of producing,” said Mary Behling, the head of the information services program at the survey. “Permitted wells are not completed, but are planned and in some stage of development.”

Behling also said that some wells may be drilled to depths below the Marcellus Shale level, including some that may reach the Utica Shale formation. However, she said her group identifies any well that produces a marketable product from the Marcellus as a Marcellus well.

The survey, an arm of the West Virginia Department of Commerce, shows there are 43 Marcellus wells in some stage of development in Ohio County, though none of them are complete and producing. All of these wells belong to Chesapeake Energy, who is in the process of building a pipeline network and compressor station near The Highlands retail development to move the gas out of the county.

“Some wells (in Ohio County) may be finished, but if they have not reported any production, we would not list them as completed,” Behling further explained.

The survey shows 34 Marcellus wells in development for Brooke County, all of which also belong to Chesapeake. There are none listed for Hancock County, but recent West Virginia Department of Environmental Protection records show at least two Chesapeake wells in development in the state’s northernmost county.

“Chesapeake is committed to responsible natural gas development in West Virginia and in all of the areas where we operate,” said Sr. Director of Corporate Development Stacey Brodak.

The story in the southern three counties of the Northern Panhandle is much different. Marshall County has 36 Marcellus completed wells, according to the survey, with 143 set to come on line in the future. Some of the finished wells are operated by Chesapeake, while others are owned by California-based Chevron, Consol Energy subsidiary CNX Gas Corp., and Louisiana-based Stone Energy. These companies – plus St. Marys, W.Va.- based Trans Energy and Texas-based Gastar Exploration – have wells under development in Marshall County.

Wetzel County has the most completed Marcellus wells in the local region with 62, according to the survey. Chesapeake, Trans Energy and Stone Energy control some of these operations, with Cairo, W.Va.-based Jay-Bee Oil and Gas, Texas-based Grenadier Energy Partners, Pittsburgh-based EQT Corp. and Washington, Pa.-based Meadow Ridge Development also in the game.

Wetzel County also has 141 wells waiting to begin operation, with Texas-based Magnum Hunter Resources and Parkersburg-based HG Energy joining the aforementioned producers in developing wells in the county.

The survey shows 46 completed Marcellus wells for Tyler County, many of which belong to Magnum Hunter following the company’s acquisition of the former Triad Resources. St. Marys, W.Va.-based Sancho Oil and Gas owns most of the other finished wells in the county. In addition to Magnum, Chesapeake and Jay-Bee also have at least one planned well each in Tyler County, the survey shows.

A state map on the survey’s website indicates areas with heavy Marcellus drilling since 2006, showing that some of the famous southern West Virginia coalfields also are becoming “gas fields.” Logan, Lincoln, Boone, Mingo and Wyoming counties feature large numbers of wells. To the north, Putnam, Jackson, Roane, rural Kanawha, Upshur, Ritchie, Doddridge, Pleasants and Harrison counties also are heavily drilled.

However, Marcellus drilling in the southern portion of the state is likely to slow down because of the low natural gas prices, industry leaders agree.

“In response to low natural gas prices, we’ve shifted our focus and are redeploying rigs from our dry gas plays to our liquid-rich plays,” Brodak said. “It’s important to remember that portions of the Marcellus South area are rich in natural gas liquids in addition to dry gas.”

“There is no question there is likely to be a slow down,” added Charlie Burd, executive director of the Independent Oil and Gas Association of West Virginia. “But up in the Northern Panhandle, with the liquids you have up there, you will still see drilling – even with the low gas price.”

DeMarco said increasing demand for natural gas must be a priority, especially regarding its use in transportation, electricity generation and manufacturing.

“Once we find more uses for the gas, the price will go back up,” he commented.