From the New York-based Marcellus Drilling News:
Anadarko Petroleum reported third quarter results on Monday. Anadarko is an independent exploration and production (E&P) company—a very large one—with a good deal of drilling in the Marcellus Shale. Third quarter revenues were $3.33 billion for the company, up 4.2% on the year.
In their operations update (MDN has extracted the Marcellus/Utica shale portion below), Anadarko reports they’ve lowered drilling costs by $1.5 million per well since 2011. It now costs them an average $2.3 million to drill a Marcellus shale well. They also report encouraging results in targeting the shallower Geneseo shale with plans for drilling the Geneseo in 2013.
From the Anadarko 3Q12 Operations Report:
Anadarko’s sales volumes for the quarter averaged 333 MMcf/d, an increase of 140% over the 3rd quarter of 2011. The company ended the quarter producing approximately 1.3 billion cubic feet of natural gas per day (Bcf/d) gross from about 385 wells. During the quarter, the company achieved an operated production record of approximately 400 MMcf/d.
The company spud 15 wells during the quarter using four operated rigs, while spudding 28 wells with an average of 10 non-operated rigs.
Anadarko continued to improve drilling and completion costs as a result of the company’s continuing focus on capital efficiency and optimization. The average drilling cost during the quarter was $2.4 million per well with more than 60% of the wells costing less than $2.3 million. The company reduced average completion costs for the quarter by approximately $1.5 million per well compared to the average completion cost during 2011. In addition, the cost of hydraulic fracturing has decreased by approximately 40% per well since 2011.
During the quarter, the company completed its second horizontal well targeting the Geneseo Shale, which lies about 1,000 feet shallower than the Marcellus Shale. Results to date from both Geneseo wells have been encouraging, with the most recent well slightly outperforming the initial well. Evaluation is ongoing with additional drilling planned for 2013 to further delineate the play.
In the company’s evaluation of the Utica Shale, five wells are currently on production and two additional exploratory wells are expected to begin testing by the end of the year. The company expects to complete the evaluation of its initial exploration program in early 2013.