MDN Editor Jim Willis Corrects “First NY Marcellus Wells” Story

No one likes to admit they were wrong, I know I don’t. Although MDN has attitude and edginess in its reporting (it is a blog/news site), I always try to be accurate and fair with the facts.

I ran what I consider to be a very important story on Friday about the potential locations of the first Marcellus and Utica wells to be drilled in New York when and if drilling begins (see Exclusive: First NY Marcellus Wells to be Drilled are Identified). There’s a decent chance I was wrong. Let me explain…

Early Friday morning I became aware of a page on the New York Dept. of Environmental Conservation (DEC) website called “Notices of Intent to Issue Well Permits in Spacing Units Which Conform to Statewide Spacing in New York State” (click here to view it). Friday morning was the first time I had viewed that page. Prior to Friday, I didn’t know it existed. At the time I viewed it early Friday morning the page had a time stamp near the top that said 7:00 pm from the night before, Thursday, Feb. 14. My immediate assumption was that the page had been updated the previous night with new information. What I did not realize (and should have), is that the time stamp on that page is automatically updated every X hours, on some sort of schedule. Conclusion: The information on that page may have been there for months, even years.

The introduction on the page says the DEC is declaring an “intent to issue permits” for the wells listed on the page because the wells meet the criteria for proper spacing. It also says the DEC won’t necessarily issue the permits. The implication is that these are the well sites ready to go as soon as regulations allow it, barring any last minute problems the DEC may spot in the permit application. I still think it’s possible this list represents the first wells to be drilled. However, the picture is potentially clouded because many of the permit applications listed are upward of 3-4 years old. Some of the original leases for those permits are likely more than 5 years old, or soon will be. Leases typically expire after 5 years. If the lease has expired, the driller may have invoked “force majeure” to extend the lease, claiming they were prevented from drilling by New York’s moratorium. It then becomes a legal tug-of-war between the driller and the landowner.

Bottom line: I don’t know where these particular permit applications stand with respect to the original lease. Have the original leases expired? Even if they have, do the landowners prefer to keep the leases going? Are the landowners contesting force majeure claims?

It could be in the end that I was right and these wells get drilled first. But it’s equally possible I will have been wrong because of lease expirations and force majeure issues. I want you, my highly valued readers, to know that.

I am personally acquainted with one of the leaseholders listed on the “Intent to Issue” page and will follow up to see if they might shed some light on the situation—at least for their particular lease. That may give me an indicator for how it will play out with the others. Stay tuned for that follow up story.

My apologies for “jumping the gun” and providing information not fully vetted.

Jim Willis, Editor
Marcellus Drilling News