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Stone Energy: 1st Utica Well Drilled, 5 Extra Marcellus Wells

Stone Energy, an independent oil and natural gas exploration and production company headquartered in Lafayette, Louisiana with operations both on- and off-shore (and with an active drilling program in the Marcellus and Utica region) released an update today. Stone says they’ve drilled their first Utica well and will test it later this year. They also say they will drill 35 Marcellus wells total this year–up from the originally forecast 30 Marcellus wells…
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Stone Energy Drills 1st Utica Well in 2Q14

Stone Energy released its second quarter financial and operational update last week. Among the highlights: the company drilled its first Utica Shale test well. The company also drilled 9 new Marcellus wells and completed 18 more Marcellus wells. Here’s a few selected portions of the Stone update from last week:
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Gastar, Stone Energy Jump on the Utica/WV Bandwagon

Gastar has traditionally concentrated on Marcellus Shale drilling in the northern panhandle of West Virginia. However, Gastar is currently drilling its first Utica Shale well in WV–in Marshall County. Based on results from others who have tried the Utica in WV, they believe they’ll have a winner.

It’s not cheap to drill the Utica in WV. The Utica/Point Pleasant formation sits two miles down. It typically costs $7 million to drill a Marcellus well in WV’s northern panhandle area–but a Utica well will cost them something like 3x that amount. And Gastar is still tickled pink and believe they’re going to make boatloads of money on it…
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Stone Energy 3Q13: Drilling 30 Marcellus Wells, Testing UD

Stone Energy is mostly an off-shore driller with a number of rigs and operations off the shores of the U.S. However, their one on-shore drilling program is in the Marcellus Shale. They’re also starting to drill test wells in the Upper Devonian (also in the northeast, same area, different shale layer).

Stone issued their third quarter 2013 update yesterday. Here are the mentions of Stone’s operations in the Marcellus and UD:
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Stone Energy Update: On Track to Drill 30 Marcellus Wells in 2013

Stone Energy is an independent driller with operations both off- and on-shore. Last December MDN told you about Stone’s plan to start spending 33% of its $650 million exploration and production budget for 2013 on drilling in the West Virginia Marcellus Shale (see Stone Energy 2013 Plans: Spend 33% of Budget on Marcellus). Plans were to drill 28-32 new Marcellus wells this year. According to Stone’s second quarter 2013 report released yesterday, they’re right on track. So far they’ve drilled 16 wells and are on track to complete up to 30 Marcellus wells by the end of this year.

In yesterday’s update, Stone CEO David Welch reiterated the company’s strategy is to move away from drilling in the relatively shallow Continental Shelf area of the Gulf of Mexico (less than 1,000 feet of water), and drill more in both the deep water Gulf region as well as in the Marcellus. Welch said their strategy continues to benefit the company with rising production numbers, particularly from the Marcellus wells drilled. We also learn from yesterday’s update that Stone has drilled a test well in the Upper Devonian Shale and expects to bring it online later this year. Select portions of yesterday’s 2Q13 update:
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Stone Energy 2012: Profits Down but Revenue & Production Up

Stone Energy released fourth quarter and full year 2012 financials and an operations update yesterday. The company reported net income for 2012 totaled $149.4 million, or $3.03 per share, on revenue of $951.5 million compared with 2011 net income of $194.3 million, or $3.97 per share, on revenue of $869.9 million. CEO David Welch noted the company increased production and reserves for the third consecutive year. Welch said production and reserves are up mostly because of the Marcellus Shale.

Select portions of the Stone press release/update dealing with the Marcellus:

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Stone Energy 2013 Plans: Spend 33% of Budget on Marcellus

Stone Energy, an independent driller, released its 2013 capital budget yesterday. Stone plans to spend $650 million in 2013, with a full one-third of that (33%) allocated to drilling in West Virginia’s Marcellus Shale. According to the announcement, Stone will use one horizontal drilling rig in the Marcellus next year to drill 26-32 new wells.

The Stone Energy announcement:

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Stone Energy 3Q12: Income Down, Revenue Up, Marcellus Expands

Stone Energy reported third quarter results yesterday. The company’s 3Q12 net income was down about half of what it was in 3Q11 (to $23.7 million), but overall revenue was higher—$226.7 million in 3Q12 vs. $209.3 million for 3Q11. The company reports drilling a total of 59 horizontal wells in the Marcellus Shale so far, 17 of them this year (in West Virginia). Of the 59 wells, 35 of them are currently producing.

Highlights from the Stone 3Q12 report:

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Stone Energy CEO Gives Marcellus Update at Barclays Event

Dave Welch, Chairman, President and CEO of Stone Energy presented at the Barclays Capital CEO Energy-Power Conference yesterday. In his prepared remarks, Mr. Welch had a fair bit to say about Stone’s drilling activities and future plans for the Marcellus and Utica Shale (variously called Appalachia and the Devonian shale below).

Among his remarks: Stone has drilled 55 Marcellus Shale wells to date, 25 of which are currently online and producing about 56 million cubic feet of natural gas per day. They have another 200 drilling locations in Marcellus/Utica wet gas areas. For now, they’re going to stick with one drilling rig in the Marcellus region because it’s “gotten so efficient.”

Here’s a transcript (courtesy of Seeking Alpha) of Mr. Welch’s comments relevant to the Marcellus and Utica region:

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Who is GreenHunter Water’s New Mystery Marcellus Customer?

GreenHunter Water has picked up a new drilling company for their water management services (see the full press release below). The new customer is an independent driller somewhere in the Marcellus Shale play that owns leases on approximately 90,000 acres in Pennsylvania and West Virginia and is looking to expand. Thing is, GreenHunter won’t (or can’t) disclose the identity of this new mystery customer they’ve just signed on. But MDN thinks it can! There’s one independent driller who claims to have 90,000 acres of leases in PA/WV and is looking to expand, and that company is…

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Delaware River Basin Commission May Become Roadblock for Drilling in Wayne County, PA and Other Watershed Counties

The City of Philadelphia is voicing their concerns to the Delaware River Basin Commission (DRBC) about Stone Energy’s request to hydraulically fracture two previously drilled wells in Wayne County, PA. Stone has also made a request to the Commission to withdraw up to 700,000 gallons of water from the West Branch of the Lackawaxen River in Mount Pleasant Township for drilling. Philly’s 17-member City Council voted unanimously to ask the DRBC to not approve the drilling permits until an environmental impact study can be done first.

An environmental impact study, an intensive and time-consuming endeavor, would determine whether natural gas drilling poses a legitimate threat to the Delaware River watershed, a 13,539-square-mile area that encompasses nearly all of Wayne County and is known for its pristine water quality and world-class trout waters.

Commission spokesman Clarke Rupert said Monday the regulator is considering conducting such a study. A decision on a $250,000 appropriation request by the commission is not expected until late 2010.*

In addition to permission from the State Department of Environmental Protection, drillers in the Delaware River Basin watershed area also need permission from the DRBC before they can drill. If the DRBC is not going to make a decision about whether or not to spend $250K on a study “until late 2010,” and if that study is a “time-consuming endeavor,” that means Stone’s request to drill will not be approved until sometime in 2011 at the earliest.

If you’re a landowner (or driller) in Wayne County, or in other counties located in the Delaware River Basin, you may be in for major delays before drilling begins. Let’s hope the DRBC speeds the process along.

*Water World (Mar 30) – Philadelphia dives in to gas drilling issue in Wayne County

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Delaware River Basic Commission to Hold Public Hearing on Requests from Stone Energy

On Wednesday, Feb. 24, the Delaware River Basin Commission will hold a public hearing in Matamoras, PA on two applications from Stone Energy Company. The first application is a request to withdraw 700,000 gallons of water a day from the West Branch of the Lackawaxen River in Mount Pleasant Township, Wayne County, PA. The water would be used by Stone Energy in Marcellus drilling activities.

The second application is for Stone Energy to use hydraulic fracturing in a gas well already drilled (in 2008). The gas well is located in Clinton Township, Wayne County. If approved, this is the would be the first Marcellus drilling activity in the Delaware River Basin.

Environmental group Delaware Riverkeeper Network is planning to take 50 of its members to the hearing to speak against the applications. Although Stone Energy only plans to draw water from the Lackawaxen, and the resulting wastewater would be treated at approved facilities, the Riverkeepers believe any drilling activity in the region would be dangerous.

For more information, see:

Pike County Courier (Feb 22)
UPDATE: Basin commission hearing for gas drilling water withdrawal permit

PhillyBurbs.com (Feb 22)
Get on the bus, says Delaware Riverkeeper

Delaware River Basin Commission – Notice of Public Hearing
Stone Energy Corporation Proposed Surface Water Withdrawal and Natural Gas Well Site