MIDDLEBOURNE - A single Magnum Hunter Resources well in Tyler County yielded more than 7 million cubic feet of natural gas in one day earlier this year, along with hundreds of barrels of natural gas liquids, leading officials at the Houston, Texas-based company to dub the area "Magnum Rich."
"Although Magnum Hunter has delayed the majority of its capital expenditures in the Appalachian division until the latter part of the year, we are excited about the recent production results from the Spencer No. 1150 well," said Jim Denny, president of the Appalachian Basin for Magnum Hunter. Given the well's initial production results, "... We believe this to be a new 'super rich' area for our company which we have coined 'Magnum Rich.'"
Magnum officials drilled the Spencer unit, located near Middlebourne, to a measured depth of 10,881 feet, or more than two miles under the earth. The well was fracked with 16 stages and tested at a 24-hour initial flowing production rate of 7.028 million cubic feet equivalent per day of natural gas.
Though this level of production will decline over time, the results also yielded 651 barrels per day of natural gas liquids, such as ethane, propane, butane and pentane.
Magnum Hunter also is watching as the Utica Shale play unfolds.
"We continue to evaluate the Utica Shale over in eastern Ohio after closing on an acquisition of an additional 12,186 net mineral acres in February 2012. We anticipate drilling several test wells to this formation on our leasehold position prior to year-end," Denny added.
Gary C. Evans, chairman and chief executive officer of Magnum Hunter, said the company's liquids operations in West Virginia - and soon in Ohio - will help overcome low natural gas prices. Records show the company also has acreage and operations in Monroe County.
"Our leasehold position in the Utica Shale continues to expand with transactions closed during the first quarter that totaled over 12,000 acres net to Magnum Hunter's interest," he said. "The company now has accumulated over 17,000 net acres that are presently prospective for the Utica Shale."
Eureka Hunter pipeline company, a subsidiary of Magnum Hunter, recently completed the initial stage of the 20-inch Pursley Lateral in Tyler County to gather gas for Triad Hunter from the new Spencer lease wells. Company officials believe this line will be extended across the Ohio River into Ohio within the next few months.
"We delivered on our promise to establish a new market value on our midstream investment in Eureka Hunter, which we accomplished with the successful closings of two separate transactions that value this subsidiary at over $400 million in enterprise value," Evans added.