Drilling and completion costs incurred during 2013 directly attributable to extensions and discoveries was $679.7m. When divided by the extensions and discoveries of 1.63 Tcfe, this yields a drill bit finding and development cost of $0.42 per Mcfe.
This is the fifth consecutive year that CONSOL Energy achieved sub-$0.50 per Mcfe drill bit finding and development costs. The company believes this is among the lowest in the industry.
Total proved reserves, as of December 31, 2013, were a record 5.731 Tcfe, which represents a 44% increase from the 3.993 Tcfe at year-end 2012. Within the total proved reserves are 146 Bcfe, or 2.5%, of oil, condensate, and liquids. Marcellus Shale reserves account for 141 Bcfe, or 97%, of these heavier hydrocarbons.
CONSOL Energy replaced 948% of its 2013 gas production, when considering increases from extensions and discoveries of 1.63 Tcfe. Production in 2013 was 172 Bcfe (net to CONSOL).
Much of the increase in reserves, through the category extensions and discoveries, was due to the company’s highly successful Marcellus Shale program. As of December 31, 2013, the Marcellus Shale consisted of 3,373 Bcfe of proved reserves. This was an 87% increase from the 1,805 Bcfe at year-end 2012. Marcellus Shale proved developed reserves were 725 Bcfe, or an increase of 70% from 427 Bcfe, over the same period.
During 2013, CONSOL Energy had 52 operated Marcellus Shale wells turned in line with an average completed lateral length of 5,483 feet and expected ultimate recovery (EUR) averaging 7.1 Bcfe per well. The utilization of enhanced completion techniques of Reduced Cluster Spacing (RCS) and Short Stage Lengths (SSL) resulted in initial 24-hour production rates as high as 18.4 MMcf/d.
Four of these wells averaged over 10 MMcf/d for 30 days. Wells completed in this manner have shown initial production rates improving by as much as 40%, which the company believes could translate into potential increases to well EURs of 15%-20%.
