Cabot reaping the benefits of productivity
BY BRENDAN GIBBONS
Times Shamrock Writer
At a well pad in the middle of a grassy field, the sound of gas flowing through pipelines filled the air. The sound – part roar, part hiss – is not often heard from wells this old.
“A year later, and that well is still howling,” said Bill desRosiers, external affairs coordinator with Cabot Oil & Gas.
Pipes carrying gas from the well to a series of sand separators, the first stage in the process of bringing gas to nearby pipelines, felt warm to the touch and vibrated with the huge volume of gas leaving the earth.
In Susquehanna County, Cabot has drilled the most productive wells in the Marcellus formation.
Daily production data show their wells might be some of the most productive on Earth, redefining the upper limits of what many professional geologists believed possible.
These two wells, Flower 2 and Flower 1, are the No. 1 and No. 3 wells in the state, according to a January through June production report filed with the state Department of Environmental Protection. Flower 2 produces about 30 million cubic feet a day, Flower 1 produces around 28 million. One day’s worth of gas from Flower 2 could fill more than 8,800 city buses.
Calculating for the most recent wellhead price reported by the U.S. Energy Information Administration, $3.35 per thousand cubic feet of gas, this means Cabot’s top well produces an average of $100,500 worth of gas per day.
The Flower wells will produce 14 billion cubic feet of gas over their lifetime, Cabot spokesman George Stark said. During its operations in West Virginia, the company would have been “ecstatic” to see a well produce 750 million cubic feet, three-quarters of a billion cubic feet, over its life, he said.
Thirteen of the top 25 wells in the state are Cabot’s, according to per-day production data compiled by MarcellusGas.org. The seven most productive wells in the state belong to Cabot. All are in Susquehanna County, with the top producers in Dimock and Springville townships.
“We strongly believe that we’re in the sweet spot,” Stark said.
The company has placed its bets on Susquehanna County, with 200,000 acres leased and 255 producing wells, Stark said. Wyoming County comes in second with two Cabot wells, desRosiers said.
The company is building a new office on Route 29, which will hold about 100 future employees, with plans to grow, Stark said.
In early November, Cabot’s vice president of operations for its north region, Phil Stalnaker, spoke at an event to mark the opening of the new Endless Mountains Health Systems center in Montrose. Cabot donated $2.2 million to help build it.
Stalnaker drilled in the Rockies, California and the mid-Continent. “I haven’t had anything like that in my experience, and I’ve been in the industry for over 30 years,” he said.
The thickness of this part of the Marcellus – 300 feet, Stalnaker said – is one reason for the high productivity in Springville and Dimock townships.
He is trying to verify whether Cabot’s top wells might be the most productive onshore gas wells ever drilled, but he thinks the answer is yes.
To non-geologists, it might seem strange that this gas-rich part of the Marcellus lies so close to a region where test wells came up nearly dry, a line adjacent to the Lackawanna and Wyoming valleys.
In 2011, exploration and production companies Exco Resources Inc., Carrizo Marcellus LLC and Encana Oil & Gas USA Inc. drilled a series of unproductive wells in northern Lackawanna, southeastern Susquehanna, southern Wyoming and northwestern Luzerne counties.
Penn State geologist Terry Engelder, Ph.D., has referred to this diagonal line separating the gas-rich from the gas-poor as the “line of death.” The intense heat and pressure that formed anthracite coal in the Lackawanna and Wyoming valleys transformed most of the methane in the nearby shale into carbon dioxide, he said.
To put it simply, the presence of anthracite coal indicates the absence of economically viable gas. “It means that at least the gas has been driven to the point where most all that’s left is CO2,” Engelder said.
A heat-absorbing reaction deep underground converts the organic material that once produced methane into “dead carbon,” or graphite, he said.
But Cabot had some valuable information that made its decision less risky, Engelder said. He said a clue to Susquehanna’s gas wealth was the presence of methane in private water wells, springs and streams.
“One of the early things that is done in considering an area for a possible gas shale play is you look around the countryside and try to determine whether there is a lot of methane in local water wells,” he said.
One place they looked was Salt Springs State Park, north of Montrose. Engelder said Cabot geologists observed methane bubbling in the spring there.
The presence of gas and drilling fluids in private water wells in Dimock has proven controversial. In 2010, the state Department of Environmental Protection issued a consent order that stated Cabot’s activities had affected 18 drinking water supplies in the Carter Road Area. Cabot disagreed with the department’s findings but agreed to pay fines, settlement money and provide water to affected landowners for about a year.
Stark said the proximity of the Tennessee Gas Pipeline, an interstate line that runs through Susquehanna, was also a major part of the decision. Whatever gas Cabot found in the area, at least it would be easier to get it to market.
A few conventional Susquehanna County wells drilled decades ago, before the rise of horizontal drilling and hydraulic fracturing, also provided some clues, Engelder said. He mentioned the H.W. Pease well, a Shell Oil Co. well drilled in 1973, as an early indicator of a future boom. In 2006, Cabot tested the Marcellus with modern techniques when they drilled a well on the Teel well pad in Springville Township. “They needed to test the Marcellus, and only after testing the Marcellus did they start to acquire a larger block of land,” Engelder said.
Susquehanna County lease records confirm this. In 2006, Cabot signed at least 173 leases. In 2007, the company signed at least 892.
Cabot’s record-smashing production is only a small piece of the success of the Marcellus as a whole.
“None of us would have predicted ahead of time the extent of the production,” Engelder said. In his original estimates from 2008 and 2009 involving production data, “the view at the time was 4 billion cubic feet was a pretty darn good well.” Many of Cabot’s wells will produce at least three times that.
“In all of our careers that we’ve seen, none of us has worked on a field or project like this,” Stalnaker said. “This really is a game-changer.”