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Williams & Cabot Partner on New 120-Mile PA to NY Pipeline

Williams Partners and Cabot Oil & Gas are working on a new 120-mile natural gas pipeline, dubbed the Constitution Pipeline, that will stretch from Susquehanna County, PA through Broome County, NY, and on through Chenango County, Delaware County, and terminate in Schoharie County, connecting to the Iroquois Gas Transmission pipeline and the Tennessee Gas pipeline (see the map embedded below).

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Compressor Station Explosion in Susquehanna County, PA

A natural gas compressor station located in Susquehanna County, PA owned and operated by Williams Partners experienced an explosion yesterday morning that blew a hole in the roof of the complex. There were no injuries and the automated emergency shutdown kicked in preventing gas from entering or leaving the station.

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Williams Buys Caiman Eastern Midstream for $2.5 Billion

Williams announced yesterday that it will buy Caiman Energy subsidiary Caiman Eastern Midstream for $2.5 billion. Caiman Midstream has a major presence in the wet gas area of the Marcellus and Utica Shale play. The acquisition will give Williams a major pipeline gathering network in northern West Virginia, southwestern Pennsylvania and eastern Ohio, along with two processing facilities and a fractionator. Williams says by 2020 the Caiman system will be gathering more than 2 billion cubic feet per day of natural gas along with 300,000 barrels per day of natural gas liquids and condensate.

In addition to the acquisition, the Caiman Energy parent company will partner with Williams in a new joint venture to further develop new midstream infrastructure in the Utica Shale. From the Williams press release:

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Cabot O&G Partners with Williams on New Marcellus Pipeline

Cabot Oil & Gas is teaming up with Williams Partners to construct a new pipeline that will stretch from Cabot’s Marcellus gas wells in Susquehanna County, PA to Schoharie County, NY where it will connect to two interstate pipelines. The new pipeline will let Cabot sell its ever-increasing production of northeastern PA shale gas into more lucrative markets in New York and New England. The new pipeline is due to go online in March 2015.

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Laser Northeast Pipeline Selling to Williams for $750M

Laser Northeast Gathering, a 33-mile natural gas pipeline that cost $55 million to build and stretches from the very active Marcellus Shale drilling area of Susquehanna County (in northeastern PA) to Broome County (in New York’s Southern Tier), connecting to the interstate Millennium Pipeline, announced yesterday the company is selling itself to Williams Partners for $750 million. The deal covers Laser’s contracts to expand the pipeline and commitments from customers already signed on. When the project is fully completed it will have 75 miles of pipeline. Laser is a subsidiary of Delphi Midstream Partners.

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Williams’ Pipeline Project in Northeast PA Hits Opposition

Williams is attempting to complete a pipeline that will at one end join to the Transco interstate gas pipeline in Dallas Township, PA, and at the other end join to the Tennesee Gas Pipeline near Springville (in Susquehanna County), PA. But local opposition from Dallas Township residents to the pipeline means Williams’ target completion date of October may be delayed.

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Williams Announces it Will Split, Exploration & Production Will Become Separate Company

Williams is one of the largest energy producers in the U.S. Their operations include exploration & production (E&P), as well as “midstream” – or processing, storage and transportation of gas, including an extensive network of pipelines. In fact, Williams owns three interstate natural gas pipelines totaling some 15,000 miles in length. We now get word that Williams is going to split the company.

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Cabot Oil & Gas Reports Increase in Production, New Wells Coming Online in 2010 in PA

PR Newswire (Feb 21)
Cabot Oil & Gas Provides Operations Update Current Marcellus Production Over 100 Mmcf per Day!

From a press release just issued by Cabot Oil & Gas, we get the following update on their Marcellus drilling activities (below is exact wording from the release):

During the third quarter call, Cabot announced its intent to complete one well per week through the end of the year in its Marcellus operation.  This effort was successful although weather at year-end and a stream-crossing delay slowed several wells from being turned in line.  During this period ten wells were completed with five wells flowing to sales and five wells waiting on pipeline.  "These five wells, that were turned in line, had an average 30 day production rate of 6 Mmcf per day," stated Dinges [Dan O. Dinges, Chairman, President and Chief Executive Officer].  "Included in this population was the Company’s first horizontal Purcell Limestone test that had a 30 day production rate of 7.3 Mmcf per day.  The Purcell is located between the Upper and Lower Marcellus under our acreage position in Susquehanna County, PA."  Dinges added, "This success potentially opens up additional locations and prospectivity."

In total for 2009, the Company drilled 30 horizontal wells with 14 being completed and turned in line.  The average initial production (IP) rate for these wells was 7.5 Mmcf per day with an average 30 day production rate of 6.9 Mmcf per day.  "Because of the production history and the consistency of results, we are now estimating ultimate reserves of 5.5 Bcf per well, up from our original disclosure of 4.5 Bcf per well," commented Dinges.

The enhanced pace of completions has carried through to 2010 with three more horizontal wells turned in line and gross production over 100 Mmcf per day as of February 19, 2010.  Since January 1, the range of 24-hour IP rates for the 2010 completions has been from 2.6 Mmcf to 16.1 Mmcf per day.  "We currently have 17 horizontal wells waiting on completion with five rigs running and two completions underway in Susquehanna County.  We also have a significant pipeline laying operation ongoing," said Dinges.  "One year ago in the Marcellus we were producing 16 Mmcf per day and now our rate is just above 100 Mmcf per day."

In terms of infrastructure, Cabot recently executed binding Agreements to anchor a new 20" high pressure gathering line.  Williams Partners L.P. (NYSE: WPZ) will construct and operate the 28-mile gathering line, which will run from Cabot’s Susquehanna County operating area south to Williams Partners’ Transco interstate gas pipeline.  The new line is expected to be in service by mid-summer 2011.  Cabot will be the majority capacity holder and this firm service will add additional flexibility to its current takeaway position. "This firm takeaway commitment goes a long way to providing the next wedge of needed capacity for the Company," stated Dinges.