EPA Issues “Final” Permit for PA Injection Well, Then Rescinds It

Looks like the word “final” doesn’t really mean “final”–at least for the federal Environmental Protection Agency. The EPA issued a “final permit” to Windfall Oil and Gas to drill a wastewater injection well near Dubois (Clearfield County), PA in February (see New Wastewater Injection Well Approved in Clearfield County, PA). The EPA’s exact language when issuing the permit after 18 months of evaluation: “Based on all of the public comments received, EPA is issuing a final permit to Windfall Oil and Gas.” The “final” permit allows Windfall to operate the well until 2019 (see a copy of the permit below). But then anti-drillers got involved and pressured the EPA. So the EPA has just taken the “unusual step” of withdrawing it’s “final” approval for the injection well. What’s it called when someone changes his or her mind on a whim? Oh yeah, flaky…
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New Wastewater Injection Well Approved in Clearfield County, PA

The federal Environmental Protection Agency has approved a new injection well in Clearfield County, PA. Windfall Oil and Gas received the permit allowing them to build an injection well in Brady Township that will pump wastewater from oil and gas drilling, including shale drilling, some 7,300 feet down for permanent disposal. (Self-serving advertisement: For a complete list of existing PA injection wells used by Marcellus drillers, see the just-published Marcellus and Utica Shale Databook, Volume 3.)

Clearfield County is located roughly in the center of the state, so it’s a good location for both northeastern and southwestern shale drillers. Here’s the details about this newest injection well coming to PA:
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PA DCED Roadshow Visits Supply Chain Company in Clearfield County

The Pennsylvania Dept. of Community & Economic Development (DCED) is hitting the road this week for its third installment of “DCED on the road.” This time they’re heading to Clearfield County, PA in northcentral PA to talk with Forum Energy Technologies, a manufacturer and supplier (i.e. supply chain company) for the Marcellus Shale natural gas industry.

While visiting Forum Energy to highlight their tremendous success due to the Marcellus, DCED reps will also visit others in the area on a listening tour–to find out what obstacles still exist for business and communities…
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Opposed to Proposed Injection Well in Clearfield County, PA

Windfall Oil & Gas Company wants to build an injection well to dispose of Marcellus Shale wastewater in Brady Township (Clearfield County), PA. They’ve submitted an application to the federal Environmental Protection Agency, which oversees permitting and regulation of injection wells nationwide. The PA Department of Environmental Protection would also need to approve such  a well.

Currently there are only eight injection wells in the entire state, two of them in Clearfield County. There is a movement by local politicians and residents to oppose the new injection well, and depending on the news account you read, there will be either an open or a mostly closed-door meeting on July 23 with the EPA present to discuss the proposed well.

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Protesters Illegally Shut Down Drilling Rig in Central PA

breaking the lawProtesters have illegally shut down an EQT drilling rig in Moshannon State Forest in central Pennsylvania. The rig was in the process of being commissioned (just getting started) and protesters blocked the road trucks were using to access the rig.

In addition to blocking the road, two protesters sat 75 feet up on a tree platform connected to a cable stretched across the road. If a truck cut through or snagged the cable, it would cause the demented protesters to fall out of the tree platform. That’s how sick these people are.

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First Reserve Invests in Two PA Marcellus Gas Pipelines

More pipeline news. First Reserve, an investment company that invests primarily in the energy industry, has just pumped $100 million into a joint venture that will give it 50% ownership in two new pipeline gathering systems in Greene and Clearfield counties in Pennsylvania. Both pipelines service the Marcellus Shale drilling industry in those areas.

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Gas Well Blowout in Clearfield County, PA Causes “Modest” Environmental Damage

What do we know about the gas well blowout that occurred on June 3rd? EOG Resources had almost completed drilling and fracking a gas well in Clearfield County, Pennsylvania when a blowout (too much pressure too fast) occurred. Here is the chronology of events:

The month long drilling operation [in Clearfield County] ended on March 3. Contractors returned in May to hydraulically fracture the well over 12 days. The process involves the injection of water, sand and chemicals under high pressure to shatter the gas-bearing rock so that the fuel can be recovered.

The frack job ended on May 28. The operator [EOG Resources] had begun well-completion operations on June 1. The blowout occurred two days later.

High pressure in an oil or gas well is both desired and essential – the pressure is what brings the fuel to the surface. Blowouts occur when the pressure surges and overwhelms control mechanisms.

A device known as a blowout preventer is attached to the wellhead at the surface. It is designed to be triggered by operators to control pressure surges.*

And this from the Pennsylvania Department of Environmental Protection (DEP) official press release on the matter:

The leak began at approximately 8 p.m. on Thursday, June 3, when the well’s operators lost control of it while preparing to extract gas after fracking the shale. As a result, natural gas and flowback frack fluid was released uncontrollably onto the ground and 75 feet into the air. The well was capped at around noon on June 4.

The EOG well pad is located in a rural area near the Penfield/Route 153 exit of Interstate 80 in northwestern Clearfield County, near Moshannon State Forest.

The department’s [DEP] Emergency Response and Oil and Gas programs responded to the incident, along with the Pennsylvania State Police, the Pennsylvania Emergency Management Agency, and local fire and police departments.**

The DEP believes the blowout preventer failed—but they don’t yet know why. Investigations continue. Since the blowout, the DEP has stopped all new drilling by EOG Resources until a cause is found:

The Department of Environmental Protection today [June 7] ordered EOG Resources Inc. to suspend its natural gas well drilling activities in Pennsylvania after a June 3 blowout at one of the company’s Clearfield County wells sent natural gas and at least 35,000 gallons of drilling wastewater into the sky and over the ground for 16 hours.

DEP Secretary John Hanger said that while the order bans all drilling and hydrofracturing, or fracking, operations for specified periods of time, the suspension will remain in effect until DEP has completed a comprehensive investigation into the leak and the company has implemented any needed changes.**

Here’s what else we know: No one was hurt. About 35,000 gallons of drilling fluid (mostly water) was spilled. The well did not explode. According to DEP Secretary John Hanger:

“Fortunately, the well did not ignite and explode, and there were no injuries to the well crew or emergency responders. Our preliminary assessment is that the environmental damage was modest as the frack fluid was contained and did not appear to reach any streams.”**

Since the accident, anti-drillers (and mainstream media) have had a field day referring to the “tragedy” and “disaster” in Clearfield County. While MDN does not excuse or minimize the accident and encourages a full investigation, a little perspective is in order: According to the Federal Highway Administration (as of 2005), an average of 115 people die every day in automobile accidents. The average number of people who die every day from gas well accidents? Zero.

*Philadelphia Inquirer (June 7) – Pa. suspends gas drilling at Marcellus rupture site
**PR Newswire (June 7) – DEP Orders EOG Resources to Halt All Natural Gas Drilling Activities in PA

Rex Energy has Already Drilled 4 Wells in Butler County, PA in 2010, On Track to Complete 6 More by Year’s End

The following operational updates about Rex Energy Corporation’s Marcellus drilling activity thus far in 2010, from a company press release:

Butler County, Pennsylvania Marcellus Project Area

Drilling and completion activity in Rex Energy’s Marcellus Shale project area in Butler County, Pennsylvania is continuing to progress on schedule. The two ‘Magill’ horizontal wells completed by the company earlier this year have been flow-testing for approximately 20 days. The combined peak 24 hour rate of the two Magill wells to date has been 5.9 MMcfe per day. The company expects these rates to continue to rise as additional water is returned to the surface. The company’s refrigeration processing plant, and therefore its gas sales in Butler County, Pennsylvania, is currently shut-in for pipeline maintenance. The company expects the plant and sales to resume during May 2010 and to connect the Magill wells to the plant at that time.

[Rex Energy President & CEO Benjamin] Hulburt remarked, “When we compare the initial flow rates of the Magill wells to our P. Knauff #1H well, our first horizontal Marcellus Shale well completed in Butler County, Pennsylvania during 2009, we are very encouraged by the results. The P. Knauff #1H well took approximately 90 days to achieve its peak rate, and thereafter, the rate remained relatively flat for the next 180 days. Although the results of the Magill wells are still preliminary, we are encouraged by what appears to be a similar profile.”

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Nytis Exploration Sells Lease for 11,657 Acres in the PA Marcellus to Northeast Natural Energy

From a press release* dated March 11:

Northeast Natural Energy LLC (“NNE”) announced today that it has closed the acquisition of 11,657 net acres in the core of the Marcellus Shale and associated shallow conventional oil and gas wells from Nytis Exploration Company LLC and from Nytis Exploration of Pennsylvania LLC (“Nytis”), both private exploration and production companies. Financial terms were not disclosed.

“We are very pleased to establish a significant acreage position in the core of the Marcellus Shale,” said Mike John, NNE’s President. “The acreage, which is very high in quality, is located in some of the most attractive areas in the Marcellus including Armstrong, Clearfield and Westmoreland Counties, Pennsylvania. This transaction provides a platform for future bolt-on positions in the region and establishes NNE’s position as a key participant in the development of the Marcellus Shale. We look forward to drilling this acreage as we continue to evaluate many other substantial opportunities in the Marcellus.”

*Business Wire (Mar 11) – Northeast Natural Energy Acquires 11,657 Net Acres in the Marcellus Shale from Nytis Exploration Company

Rex Energy Drills 7 Horizontal Gas Wells in the Marcellus in 2009, Expects to Drill Another 19 in 2010, Controls 67,000 Acres

Rex Energy Corporation, an energy company drilling in the Marcellus Shale, today announced its fourth quarter and year-end 2009 results. The portion of the press release dealing with Marcellus drilling activity is reproduced below.

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In the Appalachian Region, Rex Energy has drilled and completed nine horizontal Marcellus Shale wells to date. The company drilled and completed two of these as test wells in a different zone of the shale, which resulted in lower recoveries. Excluding the two test wells, the seven day average test rate after peak production was reached has averaged 3.1 MMcfe per day with an average lateral length of 2,200 feet. The company has experimented with six to twelve stage fracture stimulations. The average gross EUR of these wells was estimated to be 3.2 Bcfe per well at an average cost of $4.6 million.

Currently, Rex Energy is running two horizontal drilling rigs in the play. The company recently completed the drilling of two horizontal wells in Butler County. The wells have an average lateral length of 3,500 feet and were drilled in under 21 days per well. The company expects to simultaneously fracture stimulate these wells during the first quarter of 2010. The company has budgeted $4.0 million per well for its 2010 wells and it expects the wells to have average lateral lengths of 3,000 to 4,000 feet. The company is currently drilling two wells in Butler County and one well in Westmoreland County. During 2010, the company expects to drill and complete 10 gross (10 net) operated horizontal Marcellus Shale wells, and to participate in 9 gross (4.5 net) horizontal Marcellus Shale wells with our partner.

[Rex Energy’s President and CEO Benjamin] Hulburt continued, “The build-out of our Marcellus midstream infrastructure is progressing as scheduled. We expect our two Clearfield County wells to be connected to our initial gathering system in April 2010. In Butler County, we expect our midstream joint venture to put our cryogenic processing facility into operation during the fourth quarter of 2010. We expect the plant will have a processing capacity of 40 MMcf per day. We plan to install compression to permit the plant to process 20 MMcf per day initially, which will be scaled up as additional wells are brought online.”

The company has continued to lease additional acreage in its three Marcellus Shale project areas in southwestern and central Pennsylvania. Rex Energy’s current total acreage under control in the Marcellus Shale fairway is 68,700 acres, an increase of approximately 15% compared with the company’s previous leasing update in January 2010. The net acreage amount excludes approximately 22,000 acres, which can be earned by Williams pursuant to the Participation and Exploration Agreement entered into on June 18, 2009, and includes approximately 8,300 acres covered by oil and gas leases that are pending title verification and final closing.

From: MarketWatch (Mar 2) – Rex Energy Corporation Announces Fourth Quarter and Year-End 2009 Results

Energy Company EQT Buys Rights to 58,000 Acres in PA, Now Holds 500K Net Acres in the Marcellus Shale

EQT Corp. said today it is buying mineral rights to 58,000 net acres in the Marcellus Shale from a group of private operators and landowners for $280 million in stock and cash. That works out to $4,828 per acre. While the names of the sellers were not disclosed, most of the land is located in the Pennsylvania counties of Cameron, Clearfield, Elk and Jefferson.

The deal includes a 200 mile gathering system and approximately 100 producing vertical wells. The deal is expected to close on April 30th, at which time EQT will then control approximately 500,000 net acres in the Marcellus Shale.

More Details: Yahoo Finance (Mar 2) – EQT Announces Strategic Marcellus Acreage Acquisition; Increases EUR per Marcellus Well; Provides Update on Latest Marcellus Well