Pennsylvania

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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

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    Swamp Angel Energy Guilty of Illegally Dumping 200K Gallons of Brine in PA

    Mother Nature Network (Feb 22)
    Gas drillers plead guilty to felony dumping violations

    Two people from Swamp Angel Energy pled guilty last week to dumping 200,000 gallons of brine in an abandoned oil well in McKean County, Pennsylvania.

    According to the article:

    [P]art-owner Michael Evans, 66, of La Quinta, Calif., and John Morgan, 54, of Sheffield, Penn., admitted dumping 200,000 gallons of brine – salty wastewater that’s created in the drilling process – down an abandoned oil well. The maximum penalty for both Evans and Morgan is three years in prison, a fine of $250,000, or both. Sentencing will be June 24.

    Swamp Angel Energy was (and is currently) drilling in the Allegheny National Forest, located in McKean County. Also according to the article:

    Swamp Angel has 77 active, permitted wells in Pennsylvania, all of them in McKean County.

    Fellow drillers and those in the drilling industry have swiftly and rightly condemned the illegal dumping. The article is anti-drilling with a smug “See, I told you so,” kind of tone, which is to be expected coming from MNN. However, the illegal actions of a few should not be used to paint all drilling companies with the same broad brush.

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    New Marcellus Wastewater Treatment Plant Coming to Elk County, PA

    DuBois Courier-Express/Tri-County (Feb 20)
    Marcellus shale drilling water may be treated at local acid mine treatment site

    Drillers in the Marcellus Shale in Pennsylvania will soon have a new plant to treat wastewater, called flowback, from drilling activities. The new plant will be located in Brandy Camp (Elk County), PA. From the article:

    The project will be located at the existing Blue Valley acid mine drainage treatment and fish culture station in Brandy Camp, which is operated by the Toby Creek Watershed Association, according to a Friday news release.

    The project, to be known as the Blue Valley Hydrofrac Plant, will be owned and operated by Flowback Wastewater Development Group, which has Frank Nickens as director of operations.

    As for capacity of the plant:

    The first phase will provide for treatment of up to 300,000 gallons per day of hydrofracture flowback and production brine wastewaters. The output will be 1.2 million gallons per day of recycled hydrofracture makeup water or 720,000 gallons per day of treated acid mine drainage water.

    The second phase will add an additional 1.15 million gallons per day of treated acid mine drainage.

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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.

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    East Resources Predicts 6,000-7,000 New Wells for Tioga County, PA in Next Few Years

    Williamsport Sun-Gazette (Feb 18)
    New ventures in natural gas may take Tioga County from ‘rags to riches’

    An influx of people and jobs will lead to a boon in economic growth for Tioga County, Pennsylvania, according to an article in the Williamsport Sun-Gazette. Local resident Ed Trask is setting up a Community Education Team to “help manage the economic and social impacts of Marcellus Shale gas play in Tioga County.”

    Trask was quoted as saying:

    “I think the fastest growing areas of the county are going to be Mansfield, Wellsboro and Lawrenceville,” he said, adding that he thinks the valley between Mansfield and Covington will “fill in” in the next few years, mainly because of the discovery of gas within the Marcellus Shale.

    In the same article, Jack Showers, community relations liaison with drilling company East Resources Inc., said:

    [T]here already are 255,000 acres leased for natural gas wells, with up to between 6,000 and 7,000 wells drilled by East in the next several years.

    Trask added that before the drilling activity Tioga County was “slowly dying.” But now? Trask says: “I think we are going to become ‘enriched rural.’”

    One thing’s for sure: Drilling in Tioga County, PA is about to pick up rapidly.

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    PA Game Commission Executive Director Reports on Problems with Marcellus Drilling on Public Lands

    PR Newswire (Feb 16)
    Game Commission Delivers Annual Report to Legislature

    Pennsylvania Game Commission Executive Director Carl G. Roe presented the agency’s annual report to the General Assembly, and delivered testimony before the House Game and Fisheries Committee on February 16. Below is an excerpt of his testimony as it touched on the subject of drilling on Game Commission (publicly owned) lands:

    I am sure there will be questions on Marcellus Shale, so I will quickly address the subject. During Fiscal Year 2008, the Game Commission approved three oil/gas leases within the Marcellus Shale development areas of the Commonwealth.  These leases totaled 2,693.43 acres and were worth an average upfront payment of $907.38 dollars per acre to the Commission constituting an additional 10 acres of State Game Lands acquisition as well as revenues to the game fund. The average royalty per acre for these leases was 23.08 percent. During Fiscal Year 2008, there were no Marcellus wells drilled on any of these leases but there were four wells planned for drilling in the Fiscal Year 2009. On all other currently active leases on State Game Lands, there were two Marcellus wells commenced and placed into production in Fiscal Year 2008. The Game Commission received a total of $113,336.26 royalty revenues during Fiscal Year 2008 from Marcellus gas production, with the average approximate well production being only 250 mcf/day, rather than the 2,000-3,000 mcf/day production some have assumed would occur. Unfortunately, there have also been two separate environmental degradation incidents which occurred during these wells development causing the need for increased Game Commission coordination, and oversight management scrutiny.

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    Chesapeake Energy Continues to Expand Production in the Marcellus Shale

    Houston Star-Telegram (Feb 16)
    Chesapeake reports 19 percent production increase

    Chesapeake Energy, one of the largest gas drilling companies in the U.S., recently reported a 19% increase in its natural gas production across all of its shale plays. With respect to the Marcellus, we learn from a Houston Star-Telegram article that:

    • Chesapeake has a huge leasehold of 1.6 million net acres in the Marcellus
    • Current net Marcellus production equals 65 million cubic feet of gas per day
    • Chesapeake expects its Marcellus output will rise to 270 million cubic feet of gas per day by year-end 2010 (over 4x current levels)
    • Chesapeake expects its Marcellus output will rise to 450 million cubic feet of gas per day by year-end 2011 (nearly 7x current levels)
    • Three recent wells drilled in Susquehanna County (PA) had peak 24-hour rates of 8.7 million, 8.6 million and 8.4 million cubic feet of gas
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    Mitsui Investment in Anadarko Projected to Grow from $1.4 to $4 Billion in Next 10 Years

    Philly.com – Philadelphia Inquirer (Feb 17)
    Japanese firm to invest $1.4 billion in Marcellus operation

    The Philadelphia Inquirer has posted a story about the huge investment from Mitsui in Anadarko. As Marcellus Drilling News reported yesterday, Mitsui has purchased a 32.5% stake in Anadarko for $1.4 billion. What was not in the original news release is this tidbit:

    The Tokyo company expects to invest up to $4 billion over 10 years in the partnership, which would produce up to 460 million cubic feet of natural gas a day at its peak.

    We also learn from the article that 768 Marcellus wells were drilled in Pennsylvania in 2009. Anadarko alone, with Mitsui’s new investment, projects drilling 4,500 wells in PA “in the coming years.”

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    Ultra Petroleum Expands Marcellus Leases to 486,000 Acres and 110 Active Wells in 2010

    Ultra Petroleum News Release (Feb 12)
    Ultra Petroleum Reports Strong Financial and Operating Results and Record Production for 2009

    A portion of the release relating to its operations in the Marcellus in PA is extracted below:

    During 2009, Ultra drilled 37 gross (22.5 net) wells in Pennsylvania. The company’s first production in the Marcellus program began in July 2009, and by year-end 13 wells were producing. Initial production (IP) rates for the producing wells average 7,500 Mcf per day with an average lateral length of just over 3,800 feet. Preliminary estimated ultimate recoveries affirm Ultra’s 3.75 Bcfe type-curve, with some preliminary EURs exceeding 6.0 Bcfe. The cost to drill and complete a horizontal Marcellus well during 2009 was $3.5 million.

    The company’s four pipeline interconnects to major interstate pipelines remain well ahead of the drilling campaign. By mid-year, this interconnect capacity is expected to exceed 560 MMcf per day.

    The company began 2009 with 288,000 gross (152,000 net) acres in the Marcellus. Through a combination of land acquisitions, trades and swaps, Ultra increased its holdings to 326,000 gross (169,000 net) acres by year-end. On December 21, 2009, Ultra announced that it had signed a purchase and sale agreement to acquire approximately 160,000 gross (80,000 net) acres in the Marcellus Shale. Upon closing of the acquisition in late February 2010, the company will hold approximately 486,000 gross (249,000 net) acres. With the acquisition, the company’s core position in Tioga, Bradford, Lycoming, and Potter counties in north-central Pennsylvania will expand to include the adjacent counties of Clinton and Centre.

    In 2009, we initiated our horizontal Marcellus activity with above expectation results. Accordingly, we believe that we have substantially de-risked our Marcellus acreage due to these results. Well performance is improving along with our returns. Of the horizontal wells that we have completed so far, IP rates have ranged from over 3,400 Mcf per day to 10,400 Mcf per day, including two wells that are producing over 7,500 Mcf per day after 30 days. Examining our early wells, the first six have 30-day production averaging over 3,000 Mcf per day with the next seven wells averaging over 5,700 Mcf per day. In 2010, our Marcellus development program will expand with a drilling program exceeding 110 wells.

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    Anadarko Takes on Mitsui as Partner in Marcellus Drilling

    Anadarko Press Release (Feb 16)
    Anadarko Announces Joint Venture with Mitsui in the Marcellus Shale

    The full text of the press release from Anadarko is below. It announces they have taken on a partner for their Marcellus drilling interests, mostly in north-central Pennsylvania.

    Anadarko Petroleum Corporation (NYSE:APC) today announced a joint-venture agreement with Mitsui E&P USA LLC, an affiliate of Mitsui & Co., Ltd. (NSDQ: MITSY), whereby Mitsui will participate with Anadarko as a 32.5-percent partner in Anadarko’s Marcellus Shale assets, primarily located in north-central Pennsylvania, for approximately $1.4 billion. Mitsui will earn approximately 100,000 net acres in exchange for funding 100 percent of Anadarko’s share of development costs in 2010, and 90 percent of these costs thereafter, with an estimated completion of all obligations by 2013. In addition, Mitsui will have the opportunity to purchase a 32.5-percent share of Anadarko’s existing wells and additional acreage acquisitions by reimbursing a proportionate share of Anadarko’s prior expenditures, currently estimated to be approximately $100 million.

    "We are very pleased to have Mitsui as a partner in the Marcellus Shale," Anadarko Chairman and CEO Jim Hackett said. "This transaction reflects the significant value of Anadarko’s fairway position in the Marcellus Shale, which has a gross unrisked resource potential of more than 30 Tcf (trillion cubic feet) of natural gas and spans more than 715,000 gross acres. We continue to ramp up our activities in the Marcellus and anticipate drilling more than 4,500 wells over the coming years. We have successfully partnered with Mitsui in other parts of the world and look forward to working with them and our other partners in the Marcellus, as we continue to develop and deliver these domestically produced, clean-burning natural gas resources to American consumers."

    The joint-venture agreement is effective Jan. 1, 2010. Closing of the transaction is subject to applicable regulatory approvals and other contractual conditions, and is anticipated on March 15, 2010.

    A map of Anadarko’s Marcellus Shale acreage, primarily located in north-central Pennsylvania, will be available under the "Media Center/Anadarko News" tab at //www.anadarko.com.

    Anadarko Petroleum Corporation’s mission is to deliver a competitive and sustainable rate of return to shareholders by exploring for, acquiring and developing oil and natural gas resources vital to the world’s health and welfare. As of year-end 2009, the company had approximately 2.3 billion barrels-equivalent of proved reserves, making it one of the world’s largest independent exploration and production companies. For more information about Anadarko, please visit //www.anadarko.com.

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    A Balanced View of Waste Water Treatment from Marcellus Shale Drilling

    Towanda Daily Review (Nov 18):
    Treatment plant for gas drilling waste water subject of Athens Twp. hearing tonight

    An informative article about the waste water treatment plants proposed for northeastern Pennsylvania. Some tidbits from the article:

    The North Central Regional Office of the DEP, which serves Bradford, Cameron, Centre, Clearfield, Clinton, Columbia, Lycoming, Montour, Northumberland, Potter, Snyder, Sullivan, Tioga, and Union counties, has received 10 applications for NPDES permits, according to spokesman Dan Spadoni. Of those 10 applications, four are for plants proposed on the west branch of the Susquehanna River, one is for the Somerset plant on the Chemung River, one is proposed on the Tioga River, and the remainder are for various creeks and streams, he said.

    Somerset Regional Water Resources is requesting a discharge permit for around a million gallons a day, which makes it the largest in the North Central Region, Spadoni said. The other proposed plants are requesting permits for between 50,000 to 500,000 gallons per day, he said.

    The article discusses naturally occuring radioactive substances that might be concentrated in waste water, and how the plants would deal with it. The article also points out the plan is for the plants to recycle and re-use most of the water for other shale drilling instead of discharging it all into the environment. However, there will necessarily be some water discharged into tributaries and streams.

    I found this article very enlightening and balanced in its coverage–a good read for landowners and other interested parties.

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    Pennsylvania Offers 32,000 Acres of State Land for Drilling Leases

    Wellsboro Gazette (Nov 18):
    Marcellus Shale, climate change, money, politics and the environment

    Pennsylvania is offering state-owned land for lease to energy companies interested in drilling in the Marcellus Shale. According to the article:

    Monday, the secretary of the Department of Conservation and Natural Resources (DCNR), John Quigley, announced that six tracts of land are being offered for lease. The lease offering amounts to 31,967 acres.

    Nearly 22,000 of the acres for lease lie in Tioga and Potter counties.

    The 31,967 acres represents 1.5% of the total amount of state-owned forest land, a very small fraction.

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    Waste Water Treatment Plants the Next Battleground in the Drilling Debate

    Harrisburg Patriot-News (Nov 18):
    Twelve Marcellus Shale gas drilling wastewater treatment plants proposed in northern Pennsylvania

    Water treatment plants are the next battleground in the drilling debate. There is increasing opposition to the licensing of treatment plants, not only because of the chemicals used, but the truck traffic involved. From this article out of Harrisburg:

    The state Department of Environmental Protection is reviewing permit applications associated with at least 12 different proposals to build treatment plants for chemical-tainted wastewater from natural gas drilling operations in northern Pennsylvania.

    Ten of the plants are proposed in DEP’s 14-county north-central region, which is centered on Lycoming and Clinton counties.

    Also from this article, a few stats of interest:

    Through October, 120 of the 1,592 Marcellus Shale well drilling permits issued by DEP this year were for sites in Susquehanna County.

    And this:

    DEP issued 1,592 Marcellus Shale gas well drilling permits in the first 10 months of 2009. More than one-third of them were in the 14-county north-central region.

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    Cabot Oil & Gas Fined $120K over Gas-Contaminated Wells in Susquehanna County

    PA Department of Environmental Protection (Nov 4):
    Press Release: DEP Reaches Agreement with Cabot to Prevent Gas Migration, Restore Water Supplies in Dimock Township

    Below is the unaltered press release from the PA DEP:

    Meadville – The Department of Environmental Protection and Cabot Oil and Gas Corp. have executed a consent order and agreement that will provide a long-term solution for migrating gas that has affected 13 water supplies in Dimock Township, Susquehanna County.

    The affected area covers nine square miles around Carter Road.

    The consent order and agreement outlines a process that will give DEP more oversight of Cabot’s new well construction work in the affected area. Prior to drilling and hydraulic fracturing, or hydro fracking, the company will submit well casing and cementing plans to DEP. Once DEP provides written approval, Cabot may proceed.

    “The goal of the consent order and agreement is to ensure a long-term resolution to issues that have emerged in Dimock,” said DEP Northwest Regional Director Kelly Burch. “The company will focus on the integrity of the wells in the affected area in an attempt to determine the source of the migrating gas.”

    This past week, Cabot has provided an interim solution for all of the homes where water supplies have been affected. Cabot must develop a plan by March 31 to restore or replace the affected water supplies permanently.

    Under the consent order and agreement, Cabot must additionally submit to DEP:

    • Information on all parties who have contacted the company about water quantity or quality issues; and
    • A plan that specifically identifies how the company intends to prove the integrity of the casing and cementing on existing wells and fix defective casing and cementing by March 31.

    If Cabot fails to fix the defective casing and cementing by the March deadline, the company must plug defective wells or implement another alternative as approved by DEP.

    In addition, Cabot paid a $120,000 civil penalty for violations of the Oil and Gas Act, the Solid Waste Management Act and the Clean Streams Law.

    The consent order and agreement caps a DEP investigation that began early this year when numerous Dimock area residents reported evidence of natural gas in their water supplies. DEP inspectors discovered that the well casings on some of Cabot’s natural gas wells were cemented improperly or insufficiently, allowing natural gas to migrate to groundwater.

    On Sept. 25, following a series of wastewater spills, DEP ordered Cabot to cease hydro fracking natural gas wells throughout Susquehanna County. The prohibition was removed after the company completed a number of important engineering and safety tasks.

    Cabot Oil and Gas Corp. is a Delaware-based company with a mailing address in Pittsburgh.

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    Feds Deny Private Landowers the Right to Drill in PA

    Kangaroo News Service (Nov 2):
    Local Citizens, Civic and Business Leaders Launch Petition to Resume Oil and Gas Development in the Allegheny National Forest

    This one should make every landowner shudder–with anger and fear. The Obama Administration has illegally shut down drilling on private land in Pennsylvania. Landowners who own land in the Allegheny National Forest are now denied access to drill and sell the natural gas under their own land by fiat from the U.S. Forest Service, part of the executive branch of the federal government (i.e., Obama). This naked and forceful grab of individuals’ rights by the federal government cannot go unanswered. Make your voices heard!!

    We have to go all the way to an Australian news service for this one folks:

    In a petition distributed by the Pennsylvania Oil & Gas Association (POGAM) and Allegheny Forest Alliance (AFA), nearly 2,000 citizens, and civic and business leaders from Elk, Forest, Warren and McKean counties have called for President Obama and the U.S. Department of Agriculture to lift a ban on oil and gas development by the U.S. Forest Service, which effectively has halted drilling on privately owned mineral lands underlying the Allegheny National Forest. The petition was also mailed to Pennsylvania Governor Ed Rendell to encourage a greater effort by the Commonwealth to support a critical element of northwestern Pennsylvania’s economy.

    In a historically unprecedented action, local and regional managers of the Allegheny National Forest have banned oil and natural gas exploration and barred mineral owners from accessing their property throughout the forest, effectively seizing the development rights to privately owned oil, gas and mineral resources. The ban has shut down oil and natural gas exploration and stymied production in the forest, where the industry has operated for decades in cooperation with the U.S. government. The petition maintains that the ban illegally violates Pennsylvania’s grant of consent to the United States in 1921 to acquire the forest and also violates the protection of private property rights in the federal law, the Weeks Act of 1911, under which it was acquired.

    “The behavior by the Forest Service is most irresponsible, and it amounts to the unlawful taking of private property,” said Stephen W. Rhoads, POGAM president. “State records show that fewer than 50 wells, all of them permitted prior to the drilling ban imposed on January 1, have been drilled in the Allegheny National Forest during 2009. The Forest Service has prevented the drilling of between 200-300 wells that would have otherwise occurred. These undrilled wells translate into private investment of nearly $100 million and jeopardize hundreds of good-paying jobs in the region. The action of the Forest Service amounts to a full-scale assault on the economic health of the families and communities living in and around the Allegheny National Forest.”

    Private oil and gas development within the Allegheny National Forest accounts for at least 20 percent of Pennsylvania’s oil production and as much as 10 percent of Pennsylvania’s natural gas production. It contributes tens of millions of dollars annually into the regional economy of northwest Pennsylvania and western New York.

    For decades, the U.S. Forest Service and the oil and natural gas industry have worked cooperatively to manage oil and gas development. The petition represents a strong consensus among citizens and local community leaders about the importance of this industry and the condemnation of the Forest Services’ current management practices to immobilize the region’s economic recovery and progress.

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    St. Mary Completes First Two Wells in McKean County, PA

    St. Mary Land & Exploration (Nov 2):
    St. Mary Provides Operational Update; Updates Performance Guidances for 2009

    From a press release from St. Mary Land & Exploration, a drilling company headquartered in Denver, CO:

    St. Mary has drilled and completed its first two horizontal wells in this program. The wells are the Potato Creek 1H and the Potato Creek 3H (both SM 70% WI). These wells are located in McKean County, Pennsylvania. The Company is currently laying a temporary sales pipeline to test the first well. As a reminder, St. Mary has a total acreage position of approximately 41,000 net acres in McKean and Potter Counties in north central Pennsylvania.