In March 2010, CONSOL Energy (Cecil, PA) paid Dominion Resources $3.5 billion for 500,000 acres of Marcellus Shale gas leases, instantly tripling their lease holdings. Since that time, CONSOL has continued to invest in Marcellus acreage and they now have 750,000 acres under lease. But CONSOL had a problem: Not enough money to develop their vast Marcellus acreage. So they did what is now a common practice—they found a partner to invest. Yesterday, CONSOL and Noble Energy (Houston, TX) announced that Noble will buy a 50 percent interest in 663,350 net undeveloped acres and fund drilling and completion costs in a deal worth $3.4 billion over an eight-year period.
The joint venture will concentrate on ramping up development of Marcellus Shale gas wells in three areas of Pennsylvania and West Virginia (see a map of CONSOL’s acreage below):
Joint ventures are a common way for oil and gas companies to share risk, expertise and resources. Here is a list of recent deals in the Marcellus shale:
New York’s anti-drilling Attorney General, Eric T. Schneiderman, continues to target the shale gas industry. On May 31, he filed a lawsuit in federal court seeking to force the federal government to conduct a full environmental review of hydraulic fracturing before the Delaware River Basin Commission be allowed to permit drilling in its jurisdiction (see MDN’s story here). The federal government has since asked the judge in the case to toss out the lawsuit.
Now, based on a questionable article that appeared in the New York Times, written by anti-drilling author Ian Urbina (who used an intern as one of his main sources for the article), Schneiderman is using (misusing?) the considerable power of his office to target energy companies involved with shale gas drilling by sending them subpoenas for documents to “prove” their statements on shale gas reserves are accurate. The Times article claimed energy companies knowingly overstate the production of gas wells, understate how much it costs to get the gas, and intentionally inflate numbers for how much natural gas exists in shale formations.