Atlas Energy Resources Production of Natural Gas from Marcellus Shale Wells Exceeds 4 Bcfadmin
Atlas Energy Resources, LLC announced that it has completed the drilling of 98 wells to the Marcellus Shale formation, of which 90 wells, some of which have been online for two years, currently have normalized production approaching 25 million cubic feet (“Mmcf”) per day into a pipeline. The remaining 8 wells will be turned into line by the end of year. The aggregate production from these wells now exceeds 4 billion cubic feet (“Bcf”), making Atlas the nation’s largest producer of natural gas from the Marcellus Shale.
Atlas has developed a robust geologic database from its Marcellus Shale wells in southwestern Pennsylvania and has significantly enhanced its vertical completion and production techniques that include perforation schemes, multi-stage fracs, pumping rates, fluid volumes and flow back rates. The Company’s last 13 vertical Marcellus wells have averaged initial rates of production of 1.3 Mmcf per day, which is 30% higher than Atlas’s prior average vertical Marcellus well. One vertical well in Fayette County, PA had an initial rate of production of 3.6 Mmcf per day and has produced 132 Mmcf in its first 60 days. Atlas intends to drill approximately 32 additional vertical Marcellus Shale wells in its direct investment drilling program (Public 18A) that Atlas expects to commence next week and run through March 31, 2009. The Company intends to drill at least 75 additional vertical Marcellus Shale wells in subsequent drilling programs during the remainder of 2009.
This week, Atlas commenced the drilling of the lateral leg of its second horizontal Marcellus Shale well in southwestern Pennsylvania. The Company expects to finish drilling this horizontal well in November, and then complete and turn it into line in December. This well will be the first of 12 horizontal Marcellus wells Atlas will drill through two industry joint ventures before the end of the first quarter of 2009. Ten of these wells will be drilled in Washington County, PA offsetting producing wells of Range Resources. Atlas will be the operator of these horizontal wells and have a working interest of 50%. The two remaining wells will be drilled in Greene County, PA, where Atlas will be the operator and have a working interest of 25%. The total capital commitment by Atlas to drill these wells will be approximately $25 million. For the remainder of 2009, Atlas is planning to drill 12 additional horizontal Marcellus Shale wells where it will have a 100% working interest.
Atlas has all permits and equipment in place to effectuate its Marcellus drilling program. In addition to two rigs on contract that are capable of drilling the lateral section of its horizontal Marcellus wells, Atlas, through a 50% owned affiliate, will take delivery in the second quarter of 2009 of a third, built for purpose, horizontal rig (the Company uses its fleet of contracted shallow rigs to drill the vertical section of horizontal Marcellus wells). As of October 30, 2008, Atlas had 80 active Marcellus Shale drilling permits, including 70 vertical and 10 horizontal permits. Atlas has applied for sixteen additional Marcellus permits from the Pennsylvania Department of Environmental Protection (“DEP”) and more than 130 are in the process of being prepared for submission to the DEP.
As of September 30, 2008, Atlas controlled 555,000 acres in the Marcellus Shale fairway, which included 271,000 acres in its focus area of southwestern Pennsylvania. Since the beginning of 2007, Atlas has acquired 217,000 acres primarily in southwestern Pennsylvania at a fully loaded cost of $235 per acre.
The Company has drilled in southwestern Pennsylvania all but one of its Marcellus wells, and, as a result, has delineated most of this acreage. Atlas estimates that the potential net recoverable reserves attributable to its southwestern Pennsylvania acreage alone are between 4 and 6 trillion cubic feet. Atlas has achieved relatively consistent results throughout its focus acreage and all of its current production is pipeline quality gas that does not need to be treated. Through its affiliate, Atlas Pipeline Partners, L.P. (NYSE:APL), Atlas controls a gathering system capable of delivering 120 Mmcf per day into four different interstate pipelines and plans to more than double this gathering capacity by the end of 2009.
Atlas Energy Resources, LLC develops and produces domestic natural gas and oil and is one of the largest independent energy producers in the Eastern United States. Atlas Energy sponsors and manages tax-advantaged investment partnerships, in which it co-invests, to finance the development of its acreage. For more information, visit Atlas Energy’s website at www.atlasenergyresources.com or contact Investor Relations at email@example.com.