The modern-day Marcellus Shale play, which is currently the largest producing natural gas field in the United States and is believed to be among the largest known fields in the world, was discovered and pioneered by Range Resources in 2004 in Washington County, Pennsylvania. Initially, vertical wells were drilled and completed to test the production potential of the formation and gather important information to assess the reservoir properties, including gas in place, recovery factors, and economics. Based on good test results, Range began an acreage acquisition program, with a focus on southwest Pennsylvania, specifically the wet gas window in Washington County, which has become the company's core operating area. Horizontal wells and multi-stage fracturing were soon used to better develop the Marcellus and test its full potential. However, Range's initial attempts to fracture the reservoir in horizontal wells were unsuccessful due to the selected landing target. Over the course of two years and three more horizontal wells that used different landing targets and completions, Range discovered how to unlock the enormous potential in the Marcellus. Increased activity by numerous operators then began across parts of Pennsylvania as well as in West Virginia and Ohio. This paper is meant to provide a case history of Range's Marcellus Shale discovery in 2004, its many challenges, and how key milestones were reached, through determination, vision, creativity and innovation
Range Resources in 2003 - Pre Marcellus
In 2003 Range began a shift in corporate strategy from traditional, higher risk exploration to looking for large scale and repeatable resource plays. The Barnett Shale was then recognized as the first successful modern day shale play and industry was searching for the next shale play. The Marcellus opportunity presented itself in 2004, which through a combination of long term vision, opportunistic thinking, creativity and the ability to break conventional wisdom, provided Range with a path to success, starting with the first vertical completion in 2004. This was followed in 2007 with horizontal success and then rapid expansion of the Marcellus play bringing it to world-wide prominence. The opportunities, challenges, obstacles and breakthroughs were many and often the answer was to break away from old mindsets into new. The Marcellus Shale now is producing more than 9 Bcfpd, making it the largest producing gas field in the U.S.
In 2003 Range traded at about $4.00 per share with a market capitalization of approximately $400 million. Range was a smaller company from an E&P business point-of-view than it is today, with an asset portfolio that was limited to three operating areas: offshore Gulf of Mexico, the Permian Basin, and the Appalachian Basin. The growth strategy then was through development drilling, traditional exploration and focused complementary acquisitions.
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