Stone Energy provided an operational update Monday on its Utica shale exploration well at its Pribble Pad in West Virginia, saying the test well has one of the highest rates per thousand feet of lateral recorded for the Utica shale in the area. The Pribble 6HU natural gas well, for which Stone has a 90 percent working interest, produced from a 3,605-foot lateral at an average gas sales rate of approximately 30 Mmcf per day for the last 24 hours of a five-day test period.
This test flow calculates to a rate of approximately 8 Mmcf per day per thousand feet of lateral length based on the total effective lateral length of 3,605 feet for the test well.
“We are very excited about our successful Utica shale exploration well. The results from the Pribble 6HU well confirm the high potential of the Utica shale underlying our current liquids-rich Marcellus acreage position,” Stone Chairman, President and CEO David H. Welch said in a news release. “The production rate of 30 Mmcf per day, and certainly 8 Mmcf per day per thousand feet of lateral, is one of the highest Utica tests announced in the area. This well, along with the numerous third party Utica tests surrounding our acreage, has significantly de-risked our Utica position. We have already invested in land and infrastructure in this area due to our Marcellus shale efforts, and this previous investment should enhance our Utica returns.”
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Monday´s update comes on the heels of Stone´s Dec. 3 announcement that oil production had begun at its deep water Cardona project — ahead of schedule and under budget. Initial production testing started in late November, the company confirmed in a press release.
Located in Mississippi Canyon 29, the two wells, known as Cardona #4 and #5, will be closely monitored with flow rates ramping up over a four-week period. Stone anticipates the wells will reach a combined gross production volume of 12,000 barrels of oil equivalent per day during this period.
The Cardona wells, for which Stone has a 65 percent working interest, are flowing to the Stone-owned and operated Pompano platform, where no incremental net operating expense is expected.
The Cardona subsea facility allows for the tie-in of two additional wells, which are currently scheduled to be the Cardona #6 and #7 wells projected to be drilled in 2015.
Company officials say the Cardona project is an important milestone for Stone, as it is projected to bring significant production and cash flow to the company. Stone was able to commence production on this deep water project less than a year after the first well commenced drilling, which the company says is a “best-in-class timetable.”
The successful startup on the Cardona project demonstrates Stone´s deep water development capabilities, which the company will build upon as it initiates its multi-year deep water drilling program in mid-2015.
Like most energy stocks, Stone´s value has fallen significantly since Thanksgiving, when OPEC announced it would not move to cut production among its members, a decision that pushed oil prices below $66 a barrel. Stone´s stock price fell from $20.83 a share on Wednesday, Nov. 26, to $15.80 when trading reopened Friday, Nov. 28. The decline continued, with it closing at $13.50 Monday, Dec. 9, before rebounding to $15.58 Tuesday.