PROCTOR - Because Gastar Exploration is pumping about 65 million cubic feet of Marshall County natural gas daily, the company plans to spend $60 million more this year to put 19 additional wells into operation.
"In 2012, our company invested $200 million - all in Marshall County," said Michael McCown, vice president of Gastar Northeast. "The liquids-rich Marcellus (Shale) is here. That makes the operations here so valuable. This is not going to be a short-term rush. We are in this for the long haul."
During the final three months of 2012, Gastar put 11 more Marshall County wells into production, bringing the number of producing wells to 38 by the end of the year.
Photo by Casey Junkins
Gastar Exploration Vice President-Northeast Michael McCown inspects a well head at a producing Marcellus Shale natural gas well in Marshall County.
However, Gastar does plan to "temporarily slow down drilling in the Marcellus Shale" by the middle of this year. Much of this anticipated slowdown, McCown said, is to allow Williams Partners to "catch up" with its pipeline and processing infrastructure. Gastar officials also want to conduct a "thorough analysis" to determine how to maximize production.
"All of our gas goes to Williams," McCown said.
That company operates the Fort Beeler processing facility along U.S. 250 near Cameron, as well as a fractionation facility along the Ohio River south of Moundsville.
In 2011, Williams spent $2.5 billion to purchase the Fort Beeler plant and associated processing facilities and pipelines from Caiman Energy. Once Gastar's gas goes to Williams, the wet natural gas liquids such as ethane, propane and butane are separated from the dry methane gas so that all products can be sent to market.
Gastar officials believe all of the operations in Marshall and Wetzel counties will yield natural gas, liquids and condensate. Tim Carr, the Marshall Miller Professor of Energy at West Virginia University, said when a gas company categorizes natural gas liquids separately from condensate, they are likely referring to pentane.
Gastar spends about $7 million to drill and frack a single Marcellus well, according to McCown. Though the exact numbers will vary for each well, McCown said one particular well currently being drilled will go roughly 6,000 feet deep before turning to go 5,000 more feet horizontally. Slightly different equipment is used to drill the vertical and horizontal portions of the well.
"We ended another year in which we created significant asset value from our Marcellus Shale activities, delivering a 51 percent increase in total company proved reserves in 2012," said J. Russell Porter, Gastar's president and chief executive officer.
Gastar also is reinvesting in infrastructure, as the company repaved Rines Ridge and Burch Ridge in Marshall County, which suffered damage from heavy equipment traveling to drilling sites. Gastar also spent about $5 million to build a private road exclusively for drilling truck traffic, relieving much of the truck traffic from the other roads.
In another move to help reduce traffic and potential pollution, McCown said Gastar spent $4.5 million to construct facilities to pump fresh water from the Ohio River up to the drilling sites.
"During 2013, we will look for opportunities to further improve the economics and reserve recovery from our Marcellus wells, and we will step up our drilling activities in our Mid-Continent oil play on the basis of the results of our initial drilling program and the attractive high returns that should be generated from those activities," Porter added.