Shale gas opponents grasping for straws, in their failing and flailing effort to stop fracking in New York, have been latching onto a bogus theory of poor Marcellus Shale yields but Cabot Oil & Gas keeps proving them wrong.
Anti-development groups together with some of their naive friends in the media have bought into some nonsense being disseminated by Tony Ingraffea and his fractivist allies criticisms about the Marcellus Shale’s potential. They have been saying there is no economically recovered shale gas in New York; the Marcellus Shale is a boom and bust phenomena; production rates in the Marcellus Shale are declining at accelerated rates; and so on. Cabot Oil & Gas Corporation has just nitwits of these naysayers with its latest operations update. It’s a must read for anyone who might have taken taken Tony the Tiger seriously.
Cabot 10-Well Pad Production
Cabot is already well known throughout the Marcellus Shale region for its gigantic production wells; including 18 of the top 25 wells in the shale play. Some of these wells are even among the best producers in the country and they’re just a short ride from the New York border. But, it’s got even better.
Cabot Oil & Gas just announced the company’s first 10-well pad in the Marcellus Shale was officially been turned-in-line a few months ago and the results are nothing less than amazing. During a 30-day production period the pad reached an average 168 million cubic feet (Mmcf) of production, peaking at just over 201 Mmcf. Needless to say, that’s a lot of natural gas and it’s all coming from but one location.
The announcement also details how Cabot was able to reduce operational costs during drilling and hydraulic fracturing operations at this 10-well pad. Indeed, by drilling all 10 wells in quick succession, Cabot saved over $6 million dollars. Better drilling efficiencies also contributed to this reduction in costs. These are some of the reasons Cabot break-even price is well below that of many companies and why Tony and company (not to mention Deborah Rogers) are full of it when prognosticating gloom and doom regarding New York’s potential).
Green Fracking with Cabot
When it came to hydraulically fracturing the wells, Cabot completed the entire 10-well pad job using bi-fuel equipment, demonstrating how cutting edge the company and the industry it represents truly are; always three steps ahead of shale gas opponents who are, well, so yesterday. Bi-fuel equipment simultaneously burns diesel and natural gas, reducing diesel consumption by 30 – 60%.
Cabot estimates approximately 110,000 gallons of diesel fuel was replaced with its own natural gas out of nearby pipelines. No other company has, to my knowledge, completed this many wells using bi-fuel equipment in the Marcellus Shale. [Readers, if you know of examples, please provide them, as this industry is progressing so rapidly it’s hard to keep up.]
Dan O. Dinges, Cabot Chairman, President, and Chief Executive Officer said “bi-fuel operations on this pad represent the future for Cabot’s drilling and completion activities in the Marcellus and we expect these initiatives to be implemented across our entire program over the next few years.”
The Toothless Tiger Exposed
There’s one more aspect to this story and it relates to the geology, illustrated on this map depicting the depth of the Marcellus Shale/
Cabot also discussed how the shale gas wells on this 10-well pad were drilled into two separate and distinct layers of the Marcellus Shale, the upper and lower formation. Where Cabot is located, the Shale is roughly 400 feet thick and is separated by another thin layer of limestone. The fact Cabot is exploring both layers and getting exceptional returns from each indicates the Marcellus Shale is one mighty play. Don’t tell that to Tony the Tiger, though. He doesn’t know he’s toothless.