BENWOOD - Still a strong coal producer, Consol Energy has added 517 billion cubic feet of natural gas to its bid for a share of the Marcellus and Utica shale rush.
The Pittsburgh-based company that drills for natural gas under the CNX Gas Corp. subsidiary paid $237.4 million in 2011 to discover the additional proven gas reserves. Consol attributes the results to "superb geology," as well as continued refinement of drilling and fracking technology.
Best known locally for its Shoemaker and McElroy coal mining operations in Marshall County, Consol also has active gas drilling operations in Marshall and Wetzel counties under the CNX banner, according to West Virginia Department of Environmental Protection records. The company maintains gas assets in Ohio, West Virginia and Pennsylvania.
Consol plans to use $575 million in 2012 to drill wells and develop assets in the Marcellus acreage across West Virginia and Pennsylvania. Company officials previously estimated Consol holds about 663,350 natural gas acres across the two states.
Spokeswoman Lynn Seay said Marshall County is one of those in which Consol will focus its $575 million investment, noting the area near the Caiman Energy processing plant at Fort Beeler will be an area on which the company will focus this year. She said action also will take place in Barbour and Upshur counties in West Virginia, as well as Greene, Washington, Westmoreland and Indiana counties in Pennsylvania.
Consol officials believe they achieved an industry first in 2011 in the Marcellus shale by drilling 10 wells from the Hutchinson pad in Westmoreland County, Pa. The company is directing assets away from conventional natural gas drilling to focus more on horizontal Marcellus and Utica shale drilling.
On Thursday, Consol officials participated in the Credit Suisse Vail Energy Conference in Colorado. Credit Suisse is an international investment firm based in Zurich, Switzerland.
Consol officials told those attending the conference the company expects to drill 99 Marcellus shale wells in 2012, 39 of which will target ethane, propane, butane and pentane-rich gas. In the Ohio Utica shale, Consol officials said they would drill 22 wells, all of which would target these natural gas liquids, in addition to the methane portion of the natural gas stream.
Record 2011 natural gas production of 153.5 billion cubic feet for Consol reflected a 20 percent increase from the 127.9 billion cubic feet the company pumped out of the ground in 2010.
For Utica shale in Ohio, Consol entered a partnership with New York City-based Hess Corp. to explore for and develop oil, natural gas liquids and gas on 200,000 acres across Belmont, Jefferson, Harrison and Guernsey counties.
Under the CNX Gas Corp. banner, Consol had a successful 2011 Marcellus drilling program. During the year, the company drilled 78 wells, including 19 in central Pennsylvania, 50 in Southwest Pennsylvania and nine in northern West Virginia. The cost to drill and frack the wells averaged $5 million each. This means Consol spent $390 million drilling these Marcellus wells in 2011.
In horizontal Marcellus and Utica shale drilling, gas companies drill about 1 mile deep into the earth before turning the drill bit horizontally in an effort drain gas from the properties within the drilling unit. Consol's average drilled lateral was 3,850 feet. Total daily production from the Marcellus formation grew from 40 million cubic feet per day in 2010 to 77.5 million cubic feet per day last year.
