Marcellus Shale

What is it?

The Marcellus Shale is a Devonian aged black shale that contains large amount of organic material. It is located mainly beneath the states of New York, Pennsylvania, West Virginia and Ohio. This shale varies in thickness from anywhere around 250 feet to places that are less than 50 feet. The shale is located roughly a mile below the surface and more in some places.

History of the Marcellus

The Marcellus Shale has always been known to hold some natural gas but it was never seen as a viable option for extraction as the rate of return was too low to be profitable until recent years. In 2003 the first profitable well was drilled by Range Resources using the new technologies of hydraulic fracturing and horizontal drilling to exploit the play. This well was located in Washington county and production first began in this area in 2005. Within the next two years 375 permits for wells had been submitted targeting the Marcellus Shale and it was beginning to look as if this play might be a major contributor to our nation’s natural gas supply.

In 2008 estimates predicted that the Marcellus may contain around 500 trillion cubic feet of gas with about 10% of that being able to be recovered. This seemed very promising at the time but more recent surveys have suggested that number may be much lower. Today permits are being issued all over the states of Pennsylvania and West Virginia and the Marcellus is now considered to be one of the biggest contributors to our nation’s natural gas supply.

Areas of Most Production and Production Rates

The areas that have seen the most production have occurred where the shale is the thickest. This would be located in Northeastern Pennsylvania and specifically in the county of

Susquehanna. Additional areas of high production include Southwestern Pennsylvania in the counties of Greene and Washington.

Older wells drilled in the Marcellus weren’t seen as very profitable because their initial production rates were low but when looking at their decline rate they did continue to produce gas for a long period of time. Recent initial production rates have been much higher due to hydraulic fracturing and horizontal drilling but it is still hard to see their overall production because these wells have only been producing for a few years and it is hard to see how the decline curve will react.

Gas Leases and Mineral Rights

With all this new activity in the Marcellus more and more mineral rights and land owners have been approached about leasing there land and mineral rights. These prices have increased to around leasing land at $100 an acre in 2005 to a couple thousand dollars an acre today.

Those who own mineral rights will be entitled to a check they get monthly but that’s not the only way they can receive money for their mineral rights. There are many companies out there that will buy your mineral rights which is an easy way for those to get money quickly and not risk a decline in the amount they receive due to gas prices declining or wells not producing as much. This option has been a good choice for many as it is very easy and is very easy to get a quote on how much your mineral rights or royalties might be worth as all you have to do is fill out a property submission.