Abstract
The Marcellus and Utica are among the most talked about natural gas plays in the country. In this paper their productivity and economics are examined, along with a production forecast. The type curves for natural gas and oil for different production areas within the Marcellus and Utica are compiled from well-level production data to gauge productivity differences between different parts of the plays. A drilling schedule is applied to the type curves to arrive at a production forecast for the various regions. Using the type curves and processing plant data, a natural gas liquids production forecast is provided as well. The breakeven natural gas prices and internal rates of return for the various production areas are calculated using a discounted cash flow model. These metrics are compared to other plays across the US to understand the competitiveness of the Marcellus and Utica, particularly in natural gas production growth, going forward. The Marcellus already boasts the best natural gas play economics in the country and will continue to be the cheapest source of natural gas production outside of natural gas volumes produced in association with oil-directed drilling. The Utica has great production potential, as can be seen in the impressive initial production rates already observed in certain windows of the Utica. However, the high drilling and completion costs and various operational problems need to be overcome if the play is to mature into the development phase. Both the Marcellus and the Utica will continue to see investment. The Marcellus will attract capital due to its already prolific economics, and the Utica will attract capital due to the high productivity potential that could be unlocked by marching up the learning curve.
