Tue., 8:51am: Consol projects $900 million Utica investment
LEETONIA – With a field office presence in Columbiana County, Consol Energy said in a prepared release on Monday it expects to invest between $835 – $935 million in its the gas operations this year.
It estimated “$160 million of this is to maintain production,” according to J. Brett Harvey, chairman and CEO.
He added, “This figure is net of approximately $100 million in drilling carry from Hess Corporation for drilling in the Ohio Utica Shale and independent of commodity price levels.
“Consol assumes no carry from Noble Energy for drilling in the Marcellus Shale, which is dependent on natural gas being priced at or above $4 per MMBtu (Million Metric British thermal units) for three consecutive months.
“We remain focused and disciplined to drill our higher rate of return projects and benefit from the flexibility of our held-by-production (HBP) acreage position.”
Consol plans to spend $600 million continuing to develop its extensive Marcellus Shale assets, which includes drilling capital of $415 million.
Harvey continued, “The budget anticipates that the Consol/Noble Energy joint venture will drill 126 (gross) horizontal Marcellus Shale wells, including 90 (gross) wells in the liquids-rich area of the play.
“We will continue to evaluate the number of dry gas wells that we drill in light of the commodity price curve and exercise appropriate capital discipline.”
Consol also expects to invest $74 million in related gathering pipe and compression stations, he said.
While it has few leases in Columbiana County, Consol has approximately 87,000 acres in five nearby counties including Mahoning and Trumbull that it plans to drill in with partner Noble Energy.
“We remain focused and disciplined to drill our higher rate of return projects and benefit from the flexibility of our held-by-production (HBP) acreage position,” Harvey said.
In the Consol/Hess joint venture in the Utica Shale, Consol expects to invest $122 million, with $90 million of that allocated towards drilling capital for Consol’s share of 27 (gross) wells.
Because of the drilling carry, Hess pays 75 percent of Utica Shale well costs, while production is split 50/50.
Last March, CNX, Consol’s gas division, signed a year-long lease with the Columbiana County Port Authority’s in Leetonia’s World Trace Park for 10,000 square feet of office space.
It expects to have about 26 people staff the facility.