Maintaining an excellent acreage position in the Marcellus Shale play, Ultra Petroleum retains its Northeastern natural gas optionality.

Ultra controls 144,000 gross (72,000 net) acres in the heart of the Appalachian Basin’s Devonian-aged Marcellus Shale play.  The core of its position is in Centre and Clinton Counties in north-central Pennsylvania where in 2016 the properties produced an average of 40 MMCF (net) of natural gas per day.  Ultra owns a 50% working interest in the field.

In addition to the Marcellus, Ultra has identified two other drilling targets under its acreage.  The first is the shallower Geneseo Formation that has already been drilled and tested with results approximating those from the Marcellus.  It is currently producing from two horizontal wells in the field.  The second target is the Utica Formation which is being aggressively developed to the west and north of Ultra’s position, but has not yet been tested on the company’s acreage.

Ultra Petroleum’s Marcellus acreage position is centrally located in one of the best parts of the play.

Ultra’s Marcellus Shale position spans an area 50 miles long and 20 miles wide in north-central Pennsylvania’s Centre, Clinton and Lycoming Counties. It is located directly west of the town of Williamsport along the western front of the Appalachian Mountains.

The Marcellus Shale play is the nation's largest natural gas resource.

The Marcellus Shale was deposited during the middle Devonian period from 390 to 380 million years ago.  Deposition occurred in the Appalachian Basin’s shallow oceanic basin setting that extended from New York to West Virginia at that time.   Marcellus thicknesses range from 75’ in northwestern Pennsylvania to greater than 400’ in Bradford and Susquehanna counties in northeastern Pennsylvania.  Under Ultra’s leasehold, it has an average thickness of 225’ at a drilling depth of approximately 8000’.

Subsurface mapping shows Ultra’s acreage overlies a trend of large regional faults associated with a broad, gently dipping structure at the Marcellus horizon.  Marcellus thermal maturities trend higher in the area resulting in dry gas production that has an average BTU value of 1030.  Because it is also moderately geopressured, Ultra’s Marcellus resource yields high initial production rates and strong recoveries.  Drilling to date demonstrates the Marcellus Shale resource exists across Ultra’s entire acreage position, with a total of 133 wells producing, 131 of those from the Marcellus.

The two wells not producing from the Marcellus are producing from the Geneseo Formation, a second Devonian-aged shale 900’ above the Marcellus.  A great deal of Geneseo data is available from wells drilled in the field, and this data shows the Geneseo to be comparable to the Marcellus in terms of thickness and reservoir quality.  This assessment is supported by performance from the two producing Geneseo wells, and all data sources point to the Geneseo being another substantial resource under Ultra’s acreage.

To the west and north of Ultra’s position, the Ordovician-aged Utica play is undergoing rapid development and expansion.  The Utica lies below the Marcellus and represents a third resource with significant potential under Ultra’s acreage.  Initial rates in Utica wells closest to Ultra’s acreage position have exceeded 50 million cubic feet of gas per day.  Ultra has not drilled a Utica test to date, but is currently monitoring the play as it moves steadily toward Ultra’s acreage.

Ultra was an early entrant into the prolific Marcellus Shale play

Ultra Petroleum first acquired leases in northern Pennsylvania in 2001. At that time, the Company’s plans were to explore and potentially develop the deep Trenton and Black River Formations. Ultra drilled its first Trenton/Black River well in 2005 and, based on encouraging results, expanded its position to over 60,000 net acres. Subsequent wells drilled during 2007, however, soon indicated the real potential for Ultra’s leasehold was in the shallower Marcellus Formation. That led Ultra to drill its first Marcellus horizontal well in 2009 which was highly successful.

That same year, Ultra entered into a joint venture arrangement to develop the Marcellus Shale covering 210,000 gross acres. In early 2010, Ultra acquired 185,000 gross acres in the Marcellus. Ultra’s net leasehold at that time had grown to exceed 250,000 acres.

In 2014, the company divested a majority of its Marcellus Shale position due to widening basis differentials for natural gas prices. It retained 74,000 net acres at the end of 2015.

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