Consol Energy, Rice Energy Continue To Set Production Mark in Ohio Valley
WHEELING — Consol Energy produced enough natural gas from April through June to power 2.4 million homes for an entire year, while Rice Energy yielded enough fuel every day during that period to make 64,430 cross-country road trips.
Despite the ongoing industry slowdown in terms of drilling and fracking new wells, both Consol and Rice continue shattering their own quarterly natural gas production records, as the companies look forward to more drilling as commodity prices slowly recover.
Once known for coal mining, Consol continues its transition by pumping a company-best total of 99.3 billion cubic feet of natural gas for the period of April 1 to June 30.
Consol President and CEO Nicholas J. DeIuliis said the company continues to reduce its exploration and production costs while reaching the new production levels.
The firm plans to renew drilling in Monroe County before the end of this month.
“Despite the decision to resume modest drilling activity, which will add approximately $25 million of capital expenditures in 2016, Consol expects the annual exploration and production division capital budget to decrease to $190 million to $205 million due to continued capital efficiency improvements,” DeIuliis added.
The company expects to drill eight dry horizontal Utica Shale wells in Monroe County, with an average lateral length of 8,700 feet, or about 1.6 miles.
“While we have seen the industry issue equity to improve liquidity and manage leverage ratios, Consol has focused on cutting costs, improving capital efficiencies and monetizing assets,” Consol Chief Financial Officer David Khani said.
In April, Consol began recovering and selling ethane, primarily via the Sunoco Logistics’ Mariner East pipeline that sends the liquid to the Marcus Hook Industrial Complex near Philadelphia for export to Europe by ocean liner.
As for Rice, the company that features huge wells in central Belmont County named after monster trucks such as “Razin’ Kane” and “Crazy Train” produced an average of 758 million cubic feet of natural gas each day during the quarter. This is a 43-percent increase from the same quarter in 2015, as well as a 12-percent increase from the first quarter of this year.
During the second quarter, Rice invested $148 million, including $95 million to drill and frack wells. The company also hooked up nine new wells to pipelines to initiate production.
As of June 30, Rice held 57,000 acres in Ohio, nearly all of which is in Belmont County.
“We had a remarkable quarter, marked by several notable achievements, including record-low development costs and lease operating expenses, record-high production and midstream throughput volumes, and we turned to sales a company-record 18 operated wells in April,” Rice CEO Daniel Rice IV said. “With our steady development of highly economic and productive core Marcellus and Utica wells, we are uniquely positioned with a strong balance sheet and differentiated midstream asset portfolio to continue generating best-in-class growth and returns for our shareholders.”