expects average after-tax rates of return from the Aikens
wells of 50%.
CNX projected capital spending of $790-880 million in
2018, including $515-580 million of drilling and completion
capital and $275-300 million of capital associated with land,
midstream, and water infrastructure.
About 65% of the drilling and completion spending will
be in the Marcellus shale and the rest in the Utica shale.
The budget projection excludes the company’s recent acquisition from Noble Energy Inc. of a 50% membership interest in CONE Gathering LLC for $305 million. The deal
gave CNX 100% interest in CONE Gathering, which holds
all the interests in CONE Midstream GP LLC, which in turn
holds the general partnership interest in CONE Midstream
CNX renamed the company, now a single-sponsor master
limited partner with properties in Pennsylvania and West
Virginia, CNX Midstream LP.
CNX is the exploration and production company split
from coal operations of Consol Energy Inc. last year (OGJ
Online, Nov. 1, 2017).
OPEC outlook sees US
influencing global crude
markets until 2025
The Organization of Petroleum Exporting Countries expects
US unconventional crude oil production from tight shale formations to increase the country’s global market influence
through 2025, the chief economist for the cartel said on Dec. 7.
But Middle Eastern and Persian Gulf producers appear
likely to regain their global market leadership by 2040, he
added during a discussion about OPEC’s 2017 World Oil
Outlook at the Center for Strategic & International Studies
in Washington, DC.
“Tight oil supplies are the wild card. They have reshaped
the global outlook in recent years,” observed Ayed S. Al-Qa-
htani, who directs the research division at the OPEC Sec-
retariat in Vienna. “US tight oil supplies will be the most
important contributor but are expected to reach their peak
Producers in the Middle East, most of which are OPEC
members, have supplies that are relatively less expensive to
produce, but about $10.5 trillion of investments will be re-
quired in the next 23 years, he said.
“We expect their exports to increase significantly after
2025, mainly to Pacific Asia,” said Al-Qahtani, adding that
started the offshore energy discussion with his executive order. This plan continues that dialogue.” The April executive
order to which he referred reversed the former administration’s ban on Arctic oil and gas leasing and supported OCS
development (OGJ Online, Apr. 28, 2017)
Karen A. Harbert, president of the US Chamber of Commerce’s Global Energy Institute, called the plan “a long-term commitment to securing our energy future” and said it
would “help cement America’s role as an energy superpower,
creating jobs and contributing to our economy.”
Congressional energy leaders also applauded DOI’s action.
“This proposal shows President Trump and Sec. Zinke
are serious about creating jobs and making America ener-
gy-dominant,” said Sen. Bill Cassidy (R-La.), an Energy and
Commerce Committee member. “Opening the Eastern Gulf
of Mexico to American energy producers will create thou-
sands of jobs in Louisiana and other Gulf Coast states and
bring billions of dollars of investment to our country.”
Other federal lawmakers expressed strong opposition.
Referring to the DPP’s plans for leasing in the Eastern
Gulf of Mexico and off Florida’s east coast, Sen. Bill Nelson
(D-Fla.) called it “an assault on Florida’s economy, our national security, the will of the public, and the environment.
This proposal defies all common sense, and I will do everything I can to defeat it.”
CNX: Wells show deep,
dry Utica potential
Cost reduction and well performance enhanced by pressure
management have demonstrated the commercial viability of
dry-gas development in the deep Utica shale of central Pennsylvania, says CNX Resources Corp.
The company in late November started sales from two
dry Utica wells in Westmoreland County that show “the future of dry Utica development is on the immediate horizon,”
CNX Chief Operating Officer Timothy C. Dugan said in a
Jan. 9 budget update.
The company is using managed-pressure drawdown for
the wells, Aikens 5J and 5M, each of which produced an average 25 MMcfd of natural gas for 35 days under restricted
choke with average flowing casing pressure of 8,830 psi. Average lateral length is 7,500 ft.
The 5J and 5M wells offset the CNX Gaut 4IH dry Utica
well but, at an average of $15 million each, had total costs
48% below those of the older well.
With those costs and with gas prices indicated by futures
markets, and assuming the Gaut 4IH estimated ultimate recovery of 3. 5 bcf of gas equivalent/1,000 ft of lateral, CNX