So far in 2010, natural gas exploration companies have broken ground on three Marcellus Shale wells in Pennsylvania every day, triple the pace of a year ago.
The Marcellus Shale Coalition, the industry trade group, estimates that up to 1,750 wells will be drilled this year, up from 763 last year.
At $4 million a well, that's a $7 billion investment - not counting land-acquisition costs or royalties on gas produced.
Some costs are being financed by foreign companies, which are pouring billions into a region that not long ago was barely worth a glance from the window of a passing airliner.
Operators are now consolidating their holdings and lowering their production costs by drilling longer lateral bores that thread through the mile-deep shale, which lies under much of Pennsylvania and four other states.
They're also scrambling to manage the wastewater from hydraulic fracturing, the environmentally controversial extraction technique that has come under congressional scrutiny.
According to industry analysts, the pace of development is not sustainable if the price of natural gas remains below $6 per thousand cubic feet. (It's currently below $5.)
"Operators do not have the money to drill in 2011 the way they're drilling in 2010," said Subash Chandra, an energy analyst for Jefferies & Co. Inc. Some small operators are vulnerable, he said.
According to public statements and documents filed with the Securities and Exchange Commission, the Marcellus has become a top priority for many big gas operators. Clear patterns are emerging about where the biggest companies have planted their flags.
Here are the top 20 Marcellus players, ranked on the basis of the number of wells drilled since 2008, when the Pennsylvania Department of Environmental Protection (www.depweb.state.pa.us) began keeping separate statistics on Marcellus wells.
Atlas Energy Inc., Moon Township, Pa. Active in the Appalachian Basin for more than 40 years, Atlas controls 586,000 Marcellus acres, mostly in southwestern Pennsylvania. Most of its 226 wells are vertical, which produce less gas than horizontal bores.
Atlas plans to drill about 25 horizontal Marcellus wells in 2010. It has hired an investment banker to sell a stake in its acreage.
Range Resources Corp., Fort Worth, Texas. The first Marcellus well was drilled by Range in 2004, and most of its capital budget is allocated to Pennsylvania. At the end of 2009, it produced 113 million cubic feet of gas a day, top among operators. It plans to drill 150 wells this year - it has 167 already.
Range has leased 1.1 million acres in Pennsylvania. Most of its drilling has been in Washington County, but it is poised to move into Lycoming, Clinton, and Centre Counties, where it has 85 well permits.
East Resources Inc., Warren, Pa. A private company, East Resources has transformed from a traditional shallow-well operator into one of the biggest Marcellus players, with about 900,000 acres. Most of its wells, and 94 percent of its drilling permits, are in Tioga County.
Last year, it attracted a $350 million investment from private-equity firm Kohlberg, Kravis, Roberts & Co. to finance its drilling program.
Chesapeake Energy Corp., Oklahoma City. A big national gas-exploration company, Chesapeake has 1.6 million Marcellus acres and is the biggest Marcellus stakeholder, according to Jefferies & Co.
Chesapeake's well permits are mostly in Bradford and Susquehanna Counties. It has a 50-50 joint venture with Anadarko Petroleum Corp.
StatoilHydro ASA of Norway has invested $3.4 billion in Chesapeake's Marcellus venture.
Talisman Energy Inc., Calgary, Alberta. The Canadian company, which until this year operated in Pennsylvania as Fortuna Energy Inc., has acquired 218,000 Marcellus acres, primarily in Tioga and Bradford Counties.
Talisman has budgeted about $1 billion for Pennsylvania in 2010. It plans to drill 170 wells this year, up from 53 in 2009. It expects to produce up to 300 million cubic feet of Marcellus gas per day by the end of 2010, nearly five times its current output.
Cabot Oil & Gas Corp., Houston. This Texas company has put all its money into Susquehanna County. It has 253,000 acres under lease in Pennsylvania.
This year, it plans to spend about $400 million to drill 100 new Marcellus wells. It is producing 100 million cubic feet of gas a day, six times the amount of a year ago.
EOG Resources Inc., Houston. EOG holds 225,000 acres in the Pennsylvania Marcellus and drilled 13 wells in 2009.
It plans 25 to 30 wells in 2010, primarily in Clearfield, Elk, and McKean Counties, where it has a joint venture with Seneca Resources Corp.
EOG also plans several wells on its own in Bradford County.
Chief Oil & Gas L.L.C., Dallas. The private company has 560,000 Marcellus acres and well permits in 11 counties. It has concentrated on Lycoming, Bradford, and Susquehanna Counties.
Chief has set a 2010 development budget of $325 million to $350 million and plans 70 wells. It plans to add three more rigs to its current fleet of four.
Anadarko Petroleum Corp., The Woodlands, Texas. This global energy firm is the largest leaseholder in Pennsylvania state forests, with 128,000 acres. It had 350,000 acres in the Marcellus, but sold about 100,000 of them in February to Mitsui & Co. of Japan for $1.4 billion. Anadarko will operate the leases under a joint venture.
Anadarko started 11 wells in 2009 and completed six. It is a nonoperating partner in 52 other wells. Its acreage is concentrated in north-central Pennsylvania.
EQT Corp., Pittsburgh. Operator of the Equitable Gas Co. utility in three states, EQT has 450,000 acres in the Marcellus, with 1.1 trillion cubic feet of proved reserves.
In Pennsylvania, the company has permits to drill in eight counties, mostly in the southwest.
CNX Gas Corp., Canonsburg, Pa. CNX has focused on producing gas on Greene County land owned by Consol Energy Inc., the coal giant that owns 83 percent of its stock. Before entering the Marcellus, CNX primarily produced methane from shallow coal seams.
It drilled 14 deep Marcellus wells last year and increased its shale holdings from 186,000 to 250,000 acres, about 70 percent of which are considered "Tier 1," or prime acreage. CNX says it is committed to expanding its Marcellus footprint to 400,000 acres.
Rex Energy Corp., State College. A small company, Rex has 60,000 Marcellus acres. It has budgeted about $66 million to drill 10 horizontal wells in Butler County and nine wells in Westmoreland, Clearfield, and Centre Counties in joint ventures.
Seneca Resources Corp., Houston. Seneca, a subsidiary of National Fuel Gas Co., of Williamsville, N.Y., increased its 2010 Appalachian capital budget 34 percent after it won leases in January on 18,000 acres of Pennsylvania State Forest tracts.
It now controls more than 700,000 Marcellus acres, mostly in the northern part of the state.
Seneca has budgeted $1.3 billion to drill up to 365 Marcellus wells in the next three years with partners.
Pennsylvania General Energy Co. L.L.C., Warren, Pa. The private company has operated in the Appalachian Basin for three decades and drilled its first Marcellus well in Elk County in 2005.
It holds leases for more than 439,000 acres in Pennsylvania and New York, and it has focused its drilling in Lycoming and Potter Counties.
Ultra Petroleum Corp., Houston. Ultra spent $333 million this year to acquire the deep-gas rights on 78,000 acres in Clinton and Centre Counties from NCL Appalachian Partners, increasing its Marcellus position to about 249,000 acres. Its core position is in Tioga, Bradford, Lycoming, and Potter Counties.
Ultra also is involved in joint ventures with East Resources and Anadarko.
Dominion Resources Inc., Richmond, Va. The energy giant, which also owns utilities, generation companies, and pipeline systems, controls drilling rights on about 450,000 acres in West Virginia, Ohio, and southwestern Pennsylvania.
Dominion says its drilling rights are for sale and are expected to be monetized over the next two years.
Snyder Bros. Inc., Kittanning, Pa. The family-owned company has been drilling wells in Western Pennsylvania for three decades, producing about 30 million cubic feet of natural gas per day.
Its Marcellus operations are focused in Armstrong County.
Energy Corp. of America, Denver. The private company, which has been operating in Appalachia for 45 years, has focused its Marcellus efforts in Greene County, where 83 percent of its Pennsylvania drilling permits are located.
It is currently producing 15 million cubic feet of gas a day from Greene County.
The company also is expanding Marcellus operations into Clearfield County. In December, the Susquehanna River Basin Commission gave it permission to withdraw 2 million gallons of water a day for hydraulic fracturing.
XTO Energy Inc., Fort Worth. An international operator that specializes in unconventional gas plays, XTO has 217,000 net acres in Pennsylvania, 4 percent of its U.S. acreage.
XTO has sampled the Marcellus Shale like a buffet line, taking out permits in seven counties and drilling wells in both southwestern and north-central Pennsylvania. It will soon become a subsidiary of Exxon Mobil Corp., which has leases in some Pennsylvania State Forests.
Exco Resources Inc., Dallas. This company has 343,000 acres in Pennsylvania and West Virginia, about half of which are in the "fairway," the most prolific part of the Marcellus. Its efforts last year were focused on testing and evaluation.
In Pennsylvania, it has Marcellus permits in eight counties, including Lackawanna County, around Scranton.
Contact staff writer Andrew Maykuth at 215-854-2947 or email@example.com.