While nearly 1,400 E&P, oilfield-service and financial leaders were hearing executives’ Marcellus reports at Oil and Gas Investor and E&P’s Developing Unconventional Gas—East conference in Pittsburgh recently, many attendees followed presenters to post-presentation Q&A sessions to drill for more intelligence on the surface and subsurface details of the play.

Here are some of their remarks.

Question: While gas prices are so low right now, why does everyone continue to drill as hard as they can, particularly in the Marcellus?

Jeff Ventura, president and chief operating officer, Range Resources Corp.: All companies are going to high-grade and direct cash flow into the strongest projects they have. We’ve compared the Marcellus against the Haynesville, Fayetteville, Barnett. The Marcellus’ economics are the most robust.

Q: What about spacing and the potential to double the number of wells?

Ventura: If you look at other gas fields, with time spacing tends to get tighter and recoveries tend to go up, and I think you have the potential for that in the Marcellus.

Q: What gas price do you need in the Marcellus?

Murry Gerber, chairman and chief executive officer, EQT Corp.: Our wells are in the $3-million range, and the reserves are in the 3.5-Bcf (billion-cubic-foot) per-well range. We break even at $2.50 natural gas, Nymex. We make another 10% after-tax return. So, somewhere between $3.50 and $4.

Q: What is the Appalachian market for propane and ethane?

Gerber: The Appalachian region is a net importer of propane. I was surprised by that, but it is a net importer. So, that’s relatively easy to dispose of. If you’ve got a good use for ethane, we’d like to find that out. We need to think of ethane as a benefit, not as a problem. This is the most amazing thing that’s happened to us here. I’m not sure we know it.

Q: You tested verticals at first.

Mike Walen, senior vice president and COO, Cabot Oil & Gas Corp.: We drilled our first vertical well in the Marcellus in 2006, the Teal #1.

The original completion on the vertical well was 7 million cubic feet a day.

Q: On a vertical well?

Walen: On a vertical well, yes. That was our test, and that was a 24-hour test. It caught our attention; we kept it quiet. We went in and drilled an offset. It tested very, very similarly. We picked up more leases. The geochemistry of these rocks was vastly superior to what we were expecting.

Q: How does the lack of forced pooling in Pennsylvania affect drilling?

Rich Weber, president and COO, Atlas Energy Resources LLC: Pooling will negate the need to drill vertical wells along irregular lease lines and will be very good for development—for the producers and the land-holders.

If we don’t have some sort of unitization law in Pennsylvania, producers are going to have to drill vertical wells along irregular lease lines if they want to fully develop their acreage.

Q: What is your biggest challenge?

Weber: We produce about $300 million a year in free cash flow. We will be dedicating all of that to the Marcellus, but our position is so large it would take us over 35 years to develop it at that pace.

­Q: What are the technology gaps in the Marcellus?

Aubrey McClendon, chairman and CEO, Chesapeake Energy Corp.: Remember, from northeastern to southwestern Pennsylvania, it’s basically the difference between the Haynesville and the Barnett. That’s an enormous piece of real estate, so there will be a lot of differences.

Q: How much potential does the Marcellus hold?

McClendon: We’re only getting 25% to 30% of the gas out of these (and other shale) rocks. We’re going to find ways to extract that additional 5%, 10%, 15%, 20%. It’s one of the reasons I wanted to own so much acreage in shale plays. I really think they are “forever” assets—you will be looking back 20, 30, 40, 50 years from now and see that the winners were people who recognized the value of these assets and how they would get better and better over time.

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