Marcellus, Utica operator pledges $580M for 2018 operations

By Luke Geiver | January 15, 2018

CNX Resources Corp. intends to invest up to $580 million into Marcellus and Utica shale play drilling and completion activities this year. The Pittsburgh-based company said it would also spend another $275 million to $300 million on land, midstream and water infrastructure work. By the end of 2017, CNX had hedged 375 Bcfe for this year, or, 70 percent of its yearly volumes expected for this year.

The hedging activity will help the company perform its 2018 plans. More than half of the D&C activity will target the Marcellus with the other 35 percent going after the Utica.

Investment in midstream, water and land development this year will help CNX further develop stacked pay opportunities on its acreage, the company said. Non-D&C work will help with production planning throughout the next three years. The work on single formations should allow infrastructure to be in place for future focus on additional formations, the company said.

This year the company will spend nearly $100 million on water infrastructure that the company believes it will need in 2019 for the completion activities related to the areas where the infrastructure will go.

Shale gas production this year will range between 520 to 550 Bcfe, a 30 percent increase from the previous year. Through July, CNX will run three drilling rigs before adding a fourth this summer.

Although the company is mainly focusing on the Marcellus, it is pleased with results in the Utica. “Given the continuation of extraordinary results of these dry Utica wells, at substantially lower capital costs, compared to our initial well, we have successfully proven the commercial viability of developing the deep dry Utica shale in Pennsylvania,” said Tim Dugan, chief operating officer. According to Dugan, development of the dry Utica is “on the immediate horizon,” and will give the company the ability to accelerate or decelerate activity based on varying market conditions. “Our dry Utica and stacked pay opportunity-set cannot be replicated and it gives CNX a tremendous competitive advantage,” he said.

CNX currently has more than 412,000 net acres in the Marcellus and more than 377,000 net acres in the Utica.