Devonian: Another player in natural gas bonanza

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WHEELING, W.Va. – Move aside, Marcellus and Utica shales, and make way for a new player in the natural gas bonanza: the Devonian Shale.


Earlier this month, Consol Energy became the third company to successfully extract natural gas from the Devonian, following Rex Energy Corp. and Range Resources Corp. The company’s drilling attempt took place in Greene County, Pa., which lies on the eastern border of Marshall County and the northeastern border of Wetzel County.


Tim Carr, Marshall Miller professor of energy at West Virginia University, said the Upper Devonian is a mix of sandstone and other forms of rock. It lies just above the Marcellus Shale, which underlies much of West Virginia, Pennsylvania and Ohio. The Utica Shale is a much older formation that lies deeper within the earth compared to the Marcellus and Upper Devonian, he said.


“There are lots of black shale units,” Carr said regarding the Upper Devonian Shale. “How much gas and liquids is the question. There is no answer at the present. There is potential.”


“The Devonian Shale was the target of a lot of drilling activity back in the late 1970s and the 1980s,” added Robert W. Chase, professor of petroleum engineering and geology at Marietta College. “It produced both oil and gas, but was not as prolific as the Marcellus or Utica because it was not very deep and didn’t have as much pressure as the deeper formations.”


Consol’s first endeavor into the formation hit the Upper Devonian at 12,490 feet deep in Greene County, according to the company’s quarterly filing report. It drew about 3 million cubic feet per day, roughly a third of the output of two nearby Marcellus wells.


Consol drilled its Upper Devonian Shale well in the Burkett formation, which is the deepest of numerous Upper Devonian shales. Consol officials said they chose to drill their first well in the Burkett in order to test the potential interaction with deeper Marcellus Shale wells.


Corky Demarco, executive director of the West Virginia Oil and Natural Gas Association, said most of the Upper Devonian wells drilled in the Mountain State have largely resulted in the production of dry methane gas, rather than liquids or oil. He said it is “considerably” cheaper to drill an Upper Devonian well because it is not as deep or complex as one in the Marcellus or Utica. Instead of millions of gallons of water, sand and chemicals, Demarco said Upper Devonian wells in West Virginia are usually fracked with hydrogen.


“If natural gas prices increase, you could see more of these wells drilled,” he said.


For its part, Consol believes all of its northern West Virginia and southwestern Pennsylvania acreage has the potential for Upper Devonian exploration, but presently believes about 300,000 acres of this can be commercially viable. Overall, Consol’s Gas Division produced 38.6 billion cubic feet of gas, in total, during the three months from April through June, which reflects a 3 percent increase from the same period in 2012.


Production included 418 million cubic feet of dry methane gas per day, 335 barrels of oil per day, and 655 daily barrels of liquids such as propane, butane and ethane.


Consol Chairman and Chief Executive Officer J. Brett Harvey said gas production should increase in the coming years.


This fits the company’s profile of shifting more of its focus from coal mining to oil and gas drilling amid increased efforts by the Obama Administration to curtail emissions of carbon dioxide and mercury.


“Today, we’re adding rigs and accelerating our drilling. I see 2014 as a logical progression in this endeavor, where we’ll be able to continue our acceleration in gas production and deliver meaningful value to our shareholders,” Harvey said.


“And unlike pure-play exploration and production companies, we’ll have a coal division and potential asset sales that can help fund this growth,” he added.


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