|RANGE RESOURCES CORP filed this Form 8-K on 02/23/2017|
Production for the fourth quarter of 2016 averaged approximately 1,419 net Mmcfe per day for both Marcellus Shale divisions, an 11% increase over the prior year. The Southern Marcellus Shale Division averaged 1,235 net Mmcfe per day during the quarter, a 20% increase over the prior year. The Northern Marcellus Shale Division averaged 184 net Mmcf per day during the quarter, a 25% decrease over the prior year, or a 16% decrease over the prior year when adjusted for asset sales.
Southern Marcellus Shale
The Southern Marcellus Shale division brought on line ten wells in the fourth quarter, one in the super-rich area, four in the wet area and five in the dry area. The operated rig count of five has stayed consistent throughout most of the second half of 2016, with three horizontal rigs and two air rigs.
The team continues to look for ways to reduce costs and increase recoveries. Several recent examples are shown below, which have continued to drive lower normalized well costs and reductions in operating costs per mcfe.
A recent example of what we expect when going back to core areas with longer laterals is a four well pad in the wet area brought on line in the fourth quarter, with an average 9,265 lateral length with 46 stages per well. The average peak 24 hour production rate to sales, under constrained conditions was 35.1 Mmcfe per day per well, roughly twice the average rate of the offset pads. This is a result of refined completion designs, improved landing and longer laterals. On a normalized basis, average cost per well is $651,000 per 1,000 lateral foot with average EUR per well of 3.9 Bcfe per 1,000 lateral foot. On an absolute basis, these wells represent a 47% improvement in recoveries, with an 11% reduction in cost from the average shown on page 35 in the latest investor presentation, with many additional locations expected to produce similar results.
Production for the division in the fourth quarter of 2016, the first full quarter since the Memorial acquisition closing on September 16, 2016, averaged approximately 399 net Mmcfe per day, consisting of 294 Mmcf per day of gas, 13,461 barrels of NGLs per day and 3,998 barrels of condensate per day.