Marcellus Shale Gas

The Marcellus shale gas play is the largest unconventional natural gas play in North America, according to a 2009 report prepared by the U.S. Department of Energy. The Marcellus shale gas play covers an area of approximately 95,000 square miles over six states in the northeastern United States. With its proximity to the large northeast US natural gas market and expanding pipeline take-away capacity, Marcellus gas receives a premium price and has one of the lowest breakeven production costs in North America. Natural gas in the Marcellus is accessed through the application of horizontal drilling technology and multi-stage hydraulic fracturing.

To learn more about horizontal drilling and fracturing, please watch this video.

We have an interest in approximately 110,000 net acres of land in the Marcellus. In the northeast region of Pennsylvania, we are partnered with two experienced shale players – EXCO Resources Inc. and Chief Oil and Gas – in 45,000 net acres of land. This region has some of the best prospectivity for natural gas across the entire play. We also own 66,000 net operated acres in West Virginia, Maryland and central Pennsylvania where we are in direct control over the pace of development. We plan to spend approximately $190 million in the Marcellus in 2012.

We have approximately 2.3 trillion cubic feet of best estimate contingent resources associated with our acreage position in the Marcellus with estimated future production of over 150 MMcf/day in the next 5 years from this play.