Marcellus: Identifying US$90 billion in remaining value

Our granular well-level analysis of this key shale gas play indicates a strong future of continued growth 

The Marcellus is currently the largest shale gas play in the world. Its recognised commercial area spans over 30 million acres across four states and our latest research has revealed it to hold over US$90 billion in remaining value.

We expect the top 20 operators to drill 25,000 wells through to 2035 at a cost of nearly $110 billion.

In performing our research, we divided the play into 16 sub-play areas before leveraging our North America Well Analysis Tool which holds clean reported production data for each individual well.

Although rig counts have fallen across the Marcellus since early 2012, we can see that improved efficiency and a renewed focus on the play's core sub-plays have led to on-going growth.

Well results are improving, with estimated ultimate recovery (EURs) in the top areas increasing by approximately 10% since 2013, thanks to the use of longer laterals and high-volume completions.

As such, we have raised our forecast of 2020 output from 14 bcfed to 20 bcfed and estimate that the Marcellus will soon account for nearly 25% of total US shale gas supply.

Drilling and completion costs typically range from US$6 million to US$9 million across the sub-plays.

Water and proppant chart

*These and other charts are available in the downloads panel

A closer look shows that operators in the Southwest Rich Gas sub-play have gone from using four million gallons of water and one million pounds of sand per well, to ~10 million gallons and ~13 million pounds respectively over the last four years. Proppant usage increased by 58% between 2012 and 2013 alone.

This relatively recent practice, coupled with efficiency gains have led to flat, or increasing, well costs. 

Using our Well Analysis Tool, we can also benchmark operator performance. In the Susquehanna Core, Citrus Energy drilled some of the largest wells in the play prior to its acquisition by Warren Resources. However Cabot continues to dominate the sub-play in terms of drilling, acreage held and cumulative production. 

Whilst the Susquehanna Core has so far produced the top-performing dry gas wells in the Lower 48, given its size, we believe there is limited running room and that most near-term growth will come from the liquids-rich sub-plays in southwest Pennsylvania and West Virginia.

Read more
Marcellus Key Play Asset Report [Subscription required]

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Our Key Play reports offer a unique granular perspective down to the sub-play across Canada and the US Lower 48. They draw on the historic well-level data from our North America Well Analysis Tool to provide well performance, costs, economics and benchmarking analysis that will help to put you at the forefront of operations in the region.

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