On Tuesday, Rice Energy Inc. announced it will be joining the long list of companies that are cutting back on 2015 drilling operations.
The company said it will be reducing its capital budget by 19 percent compared to its 2014 spending, bringing it down to $890 million. Of the $890 million, $680 million will go toward developments in the company’s Marcellus and Utica assets. The remaining funds will be invested in the company’s Ohio gas gathering system and its freshwater distribution center. Even with the reduction in spending, Rice Energy says its production will increase by anywhere between 64 percent and 72 percent, equivalent to between 450 and 470 million cubic feet per day.
The company’s number of rigs will drop from four to three this year. Rice Energy plans on letting one Ohio rig go once the contract reaches its expiration date, which is sometime in mid-2015. The stated the following regarding its exploration and production plans in its press release:
In Pennsylvania, we expect to spud 43 gross (39 net) horizontal Marcellus wells (100% operated) and turn to sales 31 gross (26 net) horizontal Marcellus wells with an average lateral length of 7,100 feet. In addition, we are currently drilling our first Pennsylvania Utica well, which we expect to complete and turn to sales in the second half of 2015. In Ohio, we expect to spud 19 gross (12 net) horizontal Utica wells and turn to sales 12 gross (7 net) horizontal Utica wells with an average lateral length of 9,500 feet. On our non-operated properties in Ohio, we expect to spud 38 gross (9 net) horizontal Utica wells and turn to sales 15 gross (2 net) horizontal Utica wells with an average lateral length of 7,200 feet. We are currently operating two horizontal rigs in Pennsylvania and two horizontal rigs in Ohio. We plan to release one Ohio horizontal rig at the end of its contract in mid-2015 and operate three horizontal rigs for the remainder of 2015.
Rice Energy is an independent oil and gas company that is focusing on acquisitions, exploration and development in the Appalachian Basin. While led by the Rice brothers, Chief Executive Officer Daniel J. Rice IV, President and Chief Operating Officer Toby Z. Rice and Vice President of Exploration & Geology Derek A. Rice, the company has become an early identifier in the Marcellus Shale and Utica Shale.