The news out of Dimock, PA is coming so fast and furious, it’s hard to keep track of it all. First, a brief background on the situation in Dimock, the context you almost never read in the mainstream media:
In 2008, Cabot Oil & Gas drilled a number of Marcellus Shale gas wells in Dimock Township in Pennsylvania, a rural area in the northeastern part of the state, in Susquehanna County. Homeowners located along the Carter Road area noticed high levels of methane in their drinking water. After an investigation by the PA Department of Environmental Protection (DEP), the DEP fined Cabot in 2009 stating that Cabot’s operations in the area caused methane to migrate into a local water aquifer serving anywhere from 13 to 19 houses, depending on the changing storyline.
Exxon Mobil, through it’s subsidiary XTO Energy, recently acquired just over 13,200 acres of Utica Shale leases from Beck Energy Corp. in Monroe County, Ohio. A copy of the Bill of Sale, dated Dec. 20, 2011, is embedded below, containing a list of all the parcels in the transaction. Terms of the purchase are not disclosed in the document. Neither Exxon Mobil nor Beck Energy have disclosed the price and terms of the deal.
Three private water wells in Lenox Township (Susquehanna County), PA have been contaminated with methane from nearby Marcellus Shale drilling done by Cabot Oil & Gas according to the PA Department of Environmental Protection (DEP). Cabot has installed methane detection alarms in the three homes and has vented the affected wells.
Norse Energy, with substantial leases in New York State, clings to the hope that New York will soon allow shale gas drilling. In the meantime, they continue to try and hold on. Last week they sold some of their NY acreage along with a slice of the royalty rights on acreage they retain for $26.7 million (see this MDN story). Today we learn that Norse is converting $3.5 million worth of debt they owe into equity. That is, they’ve sold off another slice of the company by swapping bonds for stocks.
An interesting comment from Southwestern Energy. According to Southwestern’s CEO Steven Mueller, it’s more expensive to drill for shale gas in the Fayetteville Shale than in the Marcellus Shale, and if prices for natural gas remain as low as they are now, Southwestern will elect to reduce spending and drilling in the Fayetteville, but not the Marcellus.