Magnum Hunter Resources Corp., Houston, plans a $100 million upstream capital expenditure budget for 2015, down from the $400 million the company planned for 2014.
Allocation of $70 million was approved for its Utica and Marcellus shale exploration and development drilling program in Ohio and West Virginia, $10 million for its properties in the Williston basin in North Dakota, and $20 million for leasehold acreage acquisitions in the Utica and Marcellus.
Magnum Hunter plans to further delineate its acreage positions in Monroe, Noble, and Washington counties in Ohio, and in Tyler and Ritchie counties in West Virginia. During the year, the company plans to bring on production three net horizontal wells in the Marcellus and eight net horizontal wells in the Utica.
A number of these wells have already been drilled and are in various stages of completion, meaning capital for these projects was previously expended in fiscal year 2014.
“This budget is ‘flexible’ in that we are limiting capital spending at this time to allow upstream service costs to catch up with the drop in benchmark commodity prices that has occurred over the past several months,” commented Gary C. Evans, Magnum Hunter chairman and chief executive officer.
“Therefore, we expect that most of this capital will be spent during the second half of the year,” he said. “We are in a very unique position of anticipating 100% production growth year-over-year with minimal capital expenditures.”
Production volumes of 29,000-33,000 boe/d are expected for the year.
“Additionally, the focus on minimizing capital spending may change throughout the year as our Ohio shale play joint venture discussions with interested parties progress and we determine how this anticipated new capital will be spent on our Ohio leasehold acreage position and associated development activities,” Evans explained.