Pennsylvania-based Rice Energy Inc. intends to trim its capital spending in 2016.
The firm, one of the most active drillers in Ohio’s Utica Shale with swome of Ohio's biggest wells, will cut spending on drilling and land acquisition by 14 percent to $640 million due to low commodity prices.
The firm will spend $275 million in the Utica Shale and $285 million in the Marcellus Shale in western Pennsylvania on well drilling and completion, it said in an earnings call on Thursday with analysts and the media.
Another $80 million will be spent on land acquisition in Ohio’s Belmont County and two Pennsylvania counties.
In 2016, Rice intends to drill 12 new Utica wells and to begin production from 13 additional wells in Ohio’s Belmont County.
It will, with partner Gulfport Energy Corp., drill an additional five Utica wells and complete 14 other wells, all in Belmont County.
It also plans to drill 25 wells in the Marcellus Shale and to complete 27 wells there in 2016.
At present, Rice has 44 wells in Ohio and 52 in Pennsylvania in various stages of development.
It will maintain one drilling rig in the Utica and one rig in the Marcellus.
The company will spend an additional $305 million on product transportation and processing through Rice Midstream Holdings LLC and Rice Midstream Partners LP. That includes money for gas-gathering system in Belmont County and freshwater-for-fracking systems in Ohio and Pennsylvania.
The company is projecting production to grow by 27 to 34 percent in 2016 to 700 to 740 million cubic feet of equivalents per day.
Production in the fourth quarter 2015 grew to 624 million cubic feet of equivalents per day, 57 percent higher, than fourth quarter 2014, the firm said. Average 2015 production of 552 million cubic feet of equivalents per day was 101 percent higher than 2014 production, Rice said.
Its Utica production averaged 174 million cubic feet of equivalents per day, a 196 percent increase from fourth quarter 2014, Rice reported.
The company lost $274 million, or $2.06 per share, during the fourth quarter 2015. That’s down from a net income of $104 million, or 76 cents per share, during the fourth quarter of 2014.
Its full year income loss in 2015 was $268 million, or $2.14 per share. In 2014, Rice reported a profit of $219 million, or $1.70 per share. CEO Daniel Rice called 2015 "another banner year" for the company.