EQT
#Good morning.
Those are pretty impossible questions to answer.
What I can tell you is when we are looking out 2018, we expect the average to be 8,000 feet or above.
We continue to increase that average length pretty significantly year over year.
It's hard to predict, with additional acquisitions, what the impacts will be because they're very dependent on where they are at.
Also dependent on other activity, leasing activity, where that is.
How contiguous those pieces are.
Very tough to answer that.
I will say, in theory, we think 15,000-foot laterals are optimum.
I don't expect that we will get there.
So, be clear on that.
But any additional length up to something close to that adds real value to our investment.
So, we are going to continue to do everything we can to get them as long as we can.
<UNK>, just one additional comment to that, I would say that we clearly will have a view, if we're doing an acquisition, that it is helping us with lateral lengths.
If it's not, it's not an acquisition we would likely do.
It's hard to quantify how much that would be, but we will clearly have a view that it's improving lateral lengths.
I think we run most of our economics at the local price.
If it doesn't make sense at that, we are not going to be investing.
I think we've laid out in our investor presentation what our market mix is.
So that should give you a pretty clear idea, and it's all pretty fungible because of the header system on the Equitrans header system.
All that is connected, so we can move gas to all those markets pretty easily.
The next big shift you will see beyond the recent OBC and REX capacity, the next big one will be when MVP becomes operational and we are sending a lot of gas to the southeast market.
I think when it's all said and done, that's probably not likely to be the case.
But we did have a large, very long lateral pad right at the end of 2016 that bumped those averages up.
Originally, that pad was probably going to be a 2017 pad.
But I think that's really an indication of the results we're seeing from the acquisitions.
And we're still getting our arms around some of the specifics of the more recent acquisitions and what they are going to add.
For now, we haven't really built that in.
So, I think some of that is just preliminary numbers.
Yes.
We will certainly be above eight in 2018.
I think I'm going to pass on that for now.
I think we want to gather a little bit more data before we start quoting our uplift estimates.
I will say from the results we're seeing, they seem pretty consistent with what our modeling suggested we would see.
We are optimistic that it's working.
We don't quite have enough data to want to commit to any numbers.
I would ask you to hold off until the next call where we would expect to be able to quote something that we can stand behind.
I think the nature of the construction process is the ---+ the critical path on the MVP project is around the compressor station construction, about a 14-month time frame to do that.
So, because of the nature of that, a one-month delay in getting approval is probably a one-month delay in turn-in-line.
The next item on the critical path is the actual construction of the line, which is dependent on our ability to be able to clear trees.
And there are limits around, because of the bat populations, when we are able to do that.
So, generally speaking, and there are lots of variables, so none of this is for certain.
Delaying the notice to proceed, at least on that part of it, because it's possible to get a partial notice to proceed on the compressor stations, but if the pipeline construction is delayed into February, it might get difficult to get the trees cleared in the tree-clearing window to hold to that end-of-2018 time frame.
So those are kind of some of the key dates we are focused on.
But that said, there are possible mitigants to that in terms of, again, partial notices to proceed or possibilities of being able to extend the tree-cutting window.
So, lots of variables, but those are some key dates we're shooting for.
So east versus west in West Virginia coincides pretty well with wet versus dry.
So it's about two-thirds on the wet, so that would be the western side, one-third on the eastern side.
I think probably on the next call we can provide some updated information on the results on the eastern side.
I think we have some recent wells over there that we are real happy with the results.
Our confidence is even higher, particularly this acquired acreage in Marion and Mon, that's right near by a pad we brought online last fall that's outperforming our expectations.
We will try to target for the next call or next press release to give you some more insight on that.
I would say we don't have particular focus areas.
We look at the opportunities that come up and see how well they fit.
Some of those on the eastern side in the dryer area fit very, very well, so we get a lot of the synergy value, which is what we're looking for.
But as always, they have to make sense.
We're not going to go buy acreage in areas where we're not confident we can earn good returns on our drilling investment.
Again, we've been pretty encouraged with the results we're seeing in those areas.
So, I think we feel really good about them.
They've been a particularly nice fit with our existing position.
We certainly think it could have an impact on that, and if it does, the impact is almost certainly to shorten those cycle times.
(Multiple speakers) we haven't done enough of the work yet to really built in any benefit in 2017.
Not to say we won't see any; we might.
But I would think we will have enough of the modeling done and tested it enough hopefully by 2018 to incorporate it into our planning.
You want to take that, <UNK>.
This is <UNK> <UNK>.
We're certainly in the process of working through the Equitrans Expansion Project, and we do have expansion capabilities that would line up with MVP expansion capabilities as well.
That was just the rights that we acquired.
It's not a comment on the prospectivity of any of that.
That's the Utica rights that came with that package.
Yes, that's correct.
<UNK>, I don't think the changes in NGL prices, so far, have been dramatic enough to have us rethink where we think we are going to be drilling.
And there's always a number of factors that go into how we develop our plan.
Certainly prices are a big factor, but available capacity, where the gathering systems are ---+ have capacity to get gas to market, where we have processing capacity.
And at least personally, I'm always reluctant to make short-term changes in our plans based on short-term changes in commodity prices, especially given the 9 to 12 month delay from when we change our plans to when we are getting the production online.
It just seems like every time we try and do that, we are never in sync with the market.
We're always chasing the market, and it's changed by the time we benefit from it.
The moves would have to be dramatic and we would have to have a view that they're going to be sustained before we would really rework a calendar year development plan.
I think for the areas that we're likely to test, we have plenty of takeaway for seven wells.
I think the take-away question really isn't going to factor into where we are drilling.
These tests are still mostly designed to understand a reservoir.
I think on the cost side, we are really happy with where we are at, but we want to understand what the production mechanisms are, what the recoveries are going to be, and what's the extent of the economic area of the Utica.
That's what's going to drive our location decisions in 2017.
Thanks, Brenda, and thank you all for participating.
