Boston, MA 03/17/2014 (wallstreetpr) – The crude oil and gas industry is always searching for unexplored and potential areas for development. Recent plays by Southwestern Energy Company (NYSE:SWN) suggest that the company is looking outside the Marcellus Shale for potential development.
The Marcellus Shale:
Marcellus Shale is now the highest producing natural gas play in the U.S. It is expected to yield 14,470 million cubic feet per day from the coming months. At the second place comes Haynesville Shale with 6,466 million cubic feet per day. The difference between the first and second place is vast indicating the importance of Marcellus Shale. The most productive wells lie in North east Pennsylvania particularly in Bradford, Susquehanna, and Wyoming counties. However two counties, Luzerne and Lackawanna, have been passed out in the play. Six exploratory wells had been dug but have now been plugged and abandoned as the yields were not very encouraging. In fact, no new drilling permits have been issued since the last couple of years.
Southwestern Energy‘s plays:
There are, however, some active natural gas leases. Southwestern Energy Company (NYSE:SWN) has about 3,000 acres in Luzerne County and 38,700 acres in Lackawanna county. Some of the acreage was part of the deal with Chesapeake Appalachia LLC, when the company acquired assets of the company for $93 million. The deal included 3,000 acres in Luzerne, 14,000 acres in Lackawanna and 53,000 acres in Wyoming County. The company will be investing $800 million in the Marcellus Shale in 2014. This will include development of midstream as well as pipeline operations as well as drilling 80 to 85 horizontal wells. Overall, not all exploratory wells are drilled for estimating crude oil or natural gas potential. Some are drilled to look at the geological set up of the land.
Both natural gas and crude oil are in focus as the situation in Ukraine remains tense. A potential disruption of Russian supplies to Europe will entail demand of American natural gas and crude oil. Companies like Southwestern Energy Company (NYSE:SWN) will benefit from this.