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Marcellus Shale Hydraulic Fracturing Information
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Proved Reserves:
- Proved producing reserves of 17.6 MMBoe as of December 31, 2011:
- Total proved reserves of 29.9 MMBoe as of December 31, 2011:
Acreage:
- 369,238 net acres in the Appalachia Basin:
- 58,048 net acres located in the Marcellus Shale
- 16,000 net acres located in the Utica shale
Drilling Opportunities:
- Net Unrisked Possible Reserves of ~265 MMBoe
- Net Unrisked Contingent Reserves of ~44 MMBoe
- Over 775 net locations identified in the Appalachia region, over 290 net locations identified in the Marcellus Shale
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Key Marcellus Shale Trends:
- Primary focus on liquids rich Marcellus gas in northwest West Virgina
- The Marcellus is one of the most attractive shale plays in the United States
- The Marcellus has one of the lowest break-even price levels of all the shale plays and will remain attractive throughout the commodity cycle
- EUR's are improving from longer laterals and new fracing methods
- The Marcellus is close proximity to U.S. population centers and has access to significant interstate pipelines, thus natural gas pricing typically trades at a premium to Henry Hub
- Marcellus gas trades at a premium to Henry Hub
- Deeper potential is emerging in the Utica Shale where MHR operates
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Marcellus Properties / Operations:
- 62,200 Net Marcellus / Utica Acres
- To-date ten wells have been drilled and completed:
- Four wells in Tyler County, WV
- Five well in Wetzel County, Ohio
- One well in Monore County, Ohio
- Current Drilling / Completing Operations:
- Currently testing three new wells in Tyler County - WI 100%
- Currently drilling 3 of 4 pad wells in Tyler County - WI 100%
Utica Shale Overview:
- MHR has approximately 20,000 gross / 16,000 net acres that are prospective for the Utica Shale
- MHR has Utica potential in:
- Monroe County, Ohio
- Noble County, Ohio
- Washington County, Ohio
- Tyler County, WV
- Pleasants County, WV
- Utica Shale Characteristics:
- 200' - 300' in thickness
- 6% - 10% porosity
- 6,000 - 9,000 TVD
- TOC 2% - 6%
Southern Appalachia Overview:
- NGAS Hunter Properties:
- Long-lived assets / High Btu gas
- Approximately 273,000 Net Acres:
- Multiple low risk opportunities - Eighteen well drilling program planned for 2011 (14.25 net wells to MHR in 2011)
- Provides tremendous optionality on future gas prices
- NGAS Hunter Operations:
- Since the close of the NGAS transaction, seventeen wells have been successfully drilled and completed:
- Since Completion of the NGAS acquisition MHR has:
- Restructured existing gas gathering agreement
- Significantly reduced overhead
- Sold and continuing to sell non-core assets
- Achieved annual cost savings of approximately $5.0 milion
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