U.S. natural gas giant EQT Corporation continues finding ways to drive drilling and completions productivity levels higher at its Marcellus and Utica shale gas development.
A benchmarking exercise carried out by EQT during the quarter found the company’s recent southwest Appalachian wells were being drilled 68 per cent faster than the average of its peers, the company reported at its second quarter conference call.
“A horizontal EQT rig drilled roughly 300,000 more lateral feet per year relative to our peer average,” said EQT president and CEO Toby Rice.
One rig crew set a new world record by drilling 12,318 feet in 24 hours on a well in Greene County, Pa., Rice added. Meanwhile EQT’s completions team stimulated a record 20,880 lateral feet on a separate well.
“At nearly four miles this is one of the longest completed laterals in the history of U.S. shale development and an internal record,” said Rice, noting that completion efficiency was up 20 per cent against the year-ago quarter.
The drilling and completions performance helped EQT achieve a total sales volume of 471 bcfe during the second quarter, towards the top end of its 425–475 bcfe production guidance, according to Evaluate Energy data.
The achievement came despite lower-than-expected liquids volume from downtime at a Shell plc ethane cracker and other third-party issues which negatively impacted production by 12 bcfe compared to the forecast.
Back on track
EQT production is on track to return a 500 bcfe quarterly rate in the third quarter as third-party issues are resolved and drilling and completions continue apace. The company has maintained its expectation of 1,900–2,000 bcfe total sales volume for 2023.
It also hopes to complete its US$5.2 billion acquisition of the Tug Hill and XcL Midstream assets in the third quarter, following Federal Trade Commission (FTC) approval in the next month.
The assets will add an estimated 800 mmcfe/d to EQT’s production in the Appalachian region, as well as 95 miles of midstream gathering systems connected to long-haul interstate pipelines in southwest Appalachia.
The deal was initially announced in 2022 and has been under FTC review since then. Our review of the deal can be found here.
“It’s been a long process, but we see light at the end of the tunnel,” said Rice. “One of the guiding principles for us as we were going through this process is to make sure that we preserve the economics of the deal that we signed off, and I feel like we’re going to be able to deliver that and also preserve strategic flexibility going forward.”
The assets are expected to lower EQT’s pro forma corporate free cash flow breakeven price by approximately $0.15/mmBtu until 2027.
EQT’s production guidance does not include the impact of the Tug Hill and XcL Midstream acquisitions.
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