Quick, which county has produced the most natural gas from horizontally drilled Marcellus Shale wells?
If you said Wetzel or Doddridge, think again — it's Harrison.
With almost five years of horizontally drilled Marcellus production now under the state's belt — or out from under it, if you prefer — it's finally worthwhile to have a look at the numbers.
Producers report their monthly well-by-well production volumes to the state Department of Environmental Protection by March 31 each year, and data through December 2011 recently became available online.
DEP Office of Oil and Gas Compliance Manager Gene Smith cautions that the data are not perfect and don't need to be for their purpose, which is really only to document whether a well is still producing or not. Numbers for some wells zero out implausibly for a month or two or, in at least one case, are reported at the same level for each month of each year.
But the database does offer the most complete profile we have of the state's industry.
The observations below are based on the West Virginia Geological and Economic Survey's Sept. 20 database of completed Marcellus wells, extracted from DEP's data, to which The State Journal added DEP's monthly production data for each producing well.
Most Production: Who & Where?
The first production from a well drilled horizontally into the Marcellus Shale in West Virginia began to flow in December 2007, according to the data. It was from a Chesapeake Appalachia well at Mason Dixon Farms in Marshall County.
The state's production has accelerated dramatically since then, up from 0.2 million thousand cubic feet, or mcf, in 2008 to 1.2 million mcf in 2009, 45 million mcf in 2010 and 142 million mcf in 2011.
Chesapeake is not only the first, but by far the biggest producer: Through 2011, it had the highest cumulative production in the state, at about 84 million mcf. Latecomer Antero Resources Appalachian Corp. — its first well began producing in August 2009 — came in second at 51 million mcf, and EQT Production, which started up in May 2008, was third at 33 million mcf.
Those three producers alone represent 84 percent of the state's cumulative horizontally drilled Marcellus production of just over 200 million mcf through 2011.
In 2011 alone, 21 companies produced gas in West Virginia from horizontally drilled Marcellus wells. Most productive was Chesapeake, at 51 million mcf from 86 producing wells, with Antero catching up at 41 million mcf from 48 wells. EQT, at third, produced 24 million mcf from 66 wells.
Horizontally drilled Marcellus production for 2011 came to 142 million mcf from 282 wells. Total natural gas production from all types of wells across the state is not yet available for 2011, but that 2011 Marcellus volume represents about half of the 287 million mcf that the West Virginia Oil and Natural Gas Association reports was produced from all wells in 2010.
Production from horizontally drilled Marcellus wells had been reported in 16 counties through 2011.
In 2010, Wetzel County was on top, with Harrison, Marshall and Doddridge following in that order.
But that was all shaken up in 2011. Harrison leapt to first place with 44 million mcf, 41 million of that from Antero. Wetzel County, Chesapeake territory, slipped to second in 2011 with 33 million mcf, while Doddridge County, dominated by EQT, had 24 million mcf. Marshall, also a Chesapeake county, fell just behind Doddridge at 22 million.
Extraction of oil and gas from shale formations really only got going in earnest in a few places in the second part of the last decade. Producers talk in their earnings calls about well productivity and what they're doing to improve it and, in some shale formations that were drilled a little earlier and have been exploited a lot more thoroughly than the Marcellus, analysts find that productivity is starting to decline.
But the Marcellus is young and productivity is still climbing.
Average production per well per month eked up from about 33,300 mcf in 2008 to 33,400 in 2009 and then leapt to 44,300 in 2010 and 57,300 in 2011. Through the latter part of 2011, it hovered around 60,000 mcf/well/month.
That measure aggregates older wells in decline with newer wells at or near their peak production, so it reflects the rate at which new wells are brought online as much as it reflects improvements in operator technology and skill.
But it also reflects the state of productivity of the reserves in general: Good well locations are still available.
How about a measure of productivity that does show growth in operator technology and skill — say, the first 12 months of production for each well, plotted over time?
Rejecting wells for which any of the first 12 months of production is reported as 0 — probably erroneously — leaves 91 wells that appear to have a good first year of data.
It's a small dataset with a lot of gaps and variability, but average productivity of the first 12 months can nevertheless be seen to have risen: from about 350,000 mcf for wells started within a year of that first December 2007 well to nearly 700,000 mcf for those started in 2011.
People also talk about decline: How fast does production taper off, and how much will the wells ultimately produce?
The production reports to DEP aren't detailed enough or of high enough quality to address those technical questions.
But not to dodge the question entirely, here's some context.
With about two and a half years of experience, Antero has estimated its average Marcellus "estimated ultimate recovery" or EUR at 9.9 billion cubic feet per well, with about 1.5 billion bcf extracted in the first year.
The most productive well in the state so far, an Antero well, produced 3,000,000 mcf from December 2009 through December 2011 — that's 3 bcf, or nearly a third of Antero's average EUR.
Even though this dataset isn't perfect, with more wells producing and more data reported, it will be possible to see more patterns.
Smith makes a plea to gas producers, some of which submit their production data electronically and others on paper.
"We have more people working than we've ever had," he said. "The electronic versions are all entered within a couple months. And we understand that there are mom and pop operations that don't have access to that technology. But when we get a big company submitting 3,000 pieces of paper …" he trailed off, then summarized, "the Office of Oil and Gas would appreciate all the data being submitted electronically."
Data for 2012 production probably won't be available until about this time next year.
Horizontally drilled Marcellus wells in West Virginia:
- Most productive well-month ever: Antero Resources Appalachian Corp., Willis L. Mathey property, Harrison County, April 2011, 413,129 mcf
- Most productive well cumulatively: Also Antero, also Harrison County, Kimberly A. Male property, with nearly 3,000,000 mcf from December 2009 through December 2011
- Most productive operator through 2011: Chesapeake Appalachia, 84 million mcf
- Total number of wells producing in 2011: 282
- Total number of companies producing in 2011: 21
- Cumulative West Virginia production through 2011: 201,430,837 mcf