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Steuben County League of Women Voters Go on Record as Anti-Drilling in the Marcellus

It seems anti-drilling groups, although small in numbers, are popping up like dandelions in the spring. The latest is the Steuben County League of Women Voters, a supposedly non-partisan group (but that’s a lie, LWV is an extremely partisan group). WENY-TV has video from a recent meeting held by the League. The meeting started with a propaganda movie about drilling in Colorado to whip up the crowd.

Read the account and watch the WENY segment: Steuben County League of Women Voters Holds Natural Gas Drilling Meeting

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Marcellus Anti-Drilling Protesters Assemble in Cooperstown Outside SPE Convention

The Daily Star (Oneonta) reports that upward of 50 protesters from the Southern Tier and central New York gathered outside of Otesaga Hotel in Cooperstown to voice their disapproval of drilling in the Marcellus. Inside the hotel was a meeting/convention of the Society of Petroleum Engineers (SPE).

The Daily Star dutifully recounts the nightmarish (and inaccurate) party line of anti-drilling proponents. But to their credit, The Daily Star also reports a few counter arguments from a few people who are in the know and educated about these things–the engineers attending the SPE meeting whose job it is to safely get gas (and oil) from the ground.

Read the full article: 50 protest gas drilling at Otesaga

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Finally Some Common Sense About (Not) Taxing Marcellus Production in Pennsylvania

Pennsylvania Rep. Dave Reed (Republican, Indiana, PA) “gets it” when it comes to drilling in the Marcellus. Gov. Ed “fast Eddie” Rendell (Democrat), wants to tax drilling in the Marcellus. According to the Indiana Gazette (PA), fast Eddie’s plan calls for:
Read More “Finally Some Common Sense About (Not) Taxing Marcellus Production in Pennsylvania”

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Breaking News: Dimock Gas Wells Pass DEP Test, Cabot Not at Fault

On February 27, the Pennsylvania Department of Environmental Protection (DEP) served Cabot Oil & Gas with a “Notice of Violation” claiming Cabot’s drilling activities in the Carter Road area of Dimock Township, PA caused some local private water wells to be contaminated with methane (see the MDN article Cabot Oil & Gas Served with “Notice of Violation” in Dimock, PA). One month later, the DEP seems to have reversed its position.

Buried in the Saturday, March 28 edition of the Scranton Times-Tribune we get the story that recent test results from the DEP show no indication of water contamination due to Cabot’s hydro-fracturing activities in the area. Yes, you read that right. Cabot’s Marcellus drilling activity is not to blame for methane (natural gas) water contamination in the Dimock area according to the PA State DEP.

The DEP will continue testing and monitoring, and Cabot will continue providing water for four homes that it has been providing water to, due to elevated levels of methane in the water. But the DEP seems to have just reversed its position that Cabot is the cause of methane appearing in a few local water wells. Big news that deserves a big headline.

What has the DEP tested for that might indicate hydrofacturing has caused contamination?

Indicators could include total dissolved solids, chlorides, specific conductivity, pH, alkalinity, hardness, sodium, calcium, barium, iron, manganese, potassium and aluminum.

The DEP is promising they will continue to be vigilant in Dimock:

Residents “expressed concern to us that methane wasn’t the only thing impacting their groundwater, their wells,” DEP spokesman Mark Carmon said. “We’ll continue to look at both.”

Cabot spokesman Ken Komoroski said the company is “pleased” that the department has found no indication of wells being tainted from gas well hydro-fracturing activity, and will continue to work with the DEP to ensure the safety and health of residents.

MDN will continue to cover this story as it develops.

Read the full article: Dimock gas wells pass DEP test

Read the full DEP press release: PA DEP Continues to Analyze Dimock Water Supplies

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Lock Haven University Biology Professor (and Landowner) Recounts Positive Experience with Drilling in the Marcellus

Lock Haven University (PA) produces a regular online publication called The Hemlock. The current issue, dated March 2009, focuses on drilling in the Marcellus region in Pennsylvania. The issue is quite long with different articles focusing on different aspects of Marcellus drilling. As you can imagine, the articles are mostly negative and “the sky is falling” in nature. Fair enough. They have a viewpoint and wish to air it. Those of us who believe drilling can occur safely, but understand there will be problems along the way, have nothing to fear from the very worst the anti-drilling side can dish out. I rather enjoy reading such articles because I always learn something.

What do I learn from the opposition? As an example, one of the articles contributed is from a retired state forester–Butch Davey–offering this bit of insight into why he’s against drilling in the Marcellus:

Reading the children’s book The Lorax by Dr. Seuss to my grandchildren brings home the lesson that we need to carefully conserve the natural resources of Pennsylvania on both private and public land.  It is up to us to start living in a sustainable way so that future generations won’t be saddled with mistakes we made because of a myopic view of natural resource limitations or outright greed.

There you have it folks. Dr. Seuss, a leading light of environmental knowledge and highly-sought after expert source, is one of Mr. Davey’s inspirations.

About half way down the issue, amongst the articles recounting the gloom and doom of drilling, are a couple of landowner perspectives. One perspective is from a landowner who purchased his land without purchasing the mineral rights. Doh! When the energy companies show up and drill and you don’t get a dime from it, of course you’re going to be against it and focus on every single shortcoming and ill-effect of drilling (noise, traffic, etc.). Such a perspective is hardly impartial. Lesson to those buying land in the Marcellus: Be sure you purchase the mineral rights–and don’t blame the Realtor for your own stupidity if you don’t purchase the mineral rights, as this person did.

But, somehow The Hemlock added a pro-drilling perspective! About the only pro-drilling aspect of the entire issue–no doubt their idea of “balance.”  The perspective is offered by Dr. Ralph Harnishfeger, a biology professor at Lock Haven–someone who knows and cares about nature and the environment. He recounts how he and his wife (also a professional biologist) and his neighbors “did it right” by banding together, working out a lease that protects them all and protects the environment, while at the same time allowing drilling on their property. A win/win for everyone. He acknowledges there is always some environmental impact from drilling, but when done right, the negatives can be minimized. Slogging through the entire Hemlock issue is worth it just to read his short contribution. He concludes his perspective with this:

We believe that energy development can occur responsibly and in a manner consistent with good environmental stewardship. Farmland has been significantly altered by man from what existed prior to the arrival of Europeans on this continent and such change has dramatically improved food production and the resulting quality of life for many humans. This transition has increased habitat for some species and decreased habitat for others. It is unrealistic to expect a return to primeval forest and in the context of our highly altered environment we prefer well-managed and planned land use with the additional protections guaranteed through our lease.

It seems at its core much of the debate over drilling in the Marcellus, as is the debate for most environmental issues, is a clash of philosophies, as Dr. Harnishfeger alludes to in his summary statement. Many people erroneously believe we can return “nature” to it’s pre-man condition. They view man and his activities on this planet as an infestation rather than as a species with the God-given (or Nature-given, if you’re a non-believer) right to manage the resources around us. It is not only impractical, but idiotic to ignore the energy needs of humans and think we can return to animal skins and clubs and give up electricity, machinery and the many advances of the last 500 years of human-kind. That view is truly unsustainable.

Does drilling for natural gas impact the environment? Sure does. Do accidents happen along the way? Yes. Do we throw the baby out with the bathwater with respect to drilling because of some negatives? No way! Although The Hemlock issue is long, I encourage you to read it, particularly Dr. Harnishfeger’s contribution (especially if you’re a landowner) so you get some insights into how to “do it right” when it comes to creating a lease for your land.

Read the issue here: The Hemlock, Volume 2, Issue 6 (March 2009)

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Drilling Activity is Linked to the Price of Natural Gas

I suppose the headline of this post may have you saying, “It doesn’t take a genius to figure that out.” But how, exactly, does the spot price for natural gas relate to drilling activity? Can we quantify it? Let’s try.

In a recent article on an investment blog called Energy & Capital, author Keith Kohl offers some excellent insights into the natural gas marketplace from the perspective of those interested in investing in it. And along the way, he makes some observations well worth reading for landowners in the Marcellus. I encourage you to read the entire article.

Here are just a few insights from his article:

[N]atural gas has been treading water. After deteriorating more than 70% since July records, prices have fallen below $4/Mcf this week. That’s a level many people thought they’d never see. And to make matters worse, I’ve been hearing more and more people calling for natural gas to plummet below $2/Mcf and stay in that range for several months.

Developing…shale sources will be extremely difficult (or even nonexistent) if natural gas prices fall below $2/Mcf for a sustained period. The depreciation of natural gas prices since July has already caused companies across the board to slash exploration and production spending.

Much like the oil industry, not a week passes that I don’t see another project being delayed or canceled. Furthermore, the number of active drilling rigs has been in serious decline. The latest numbers from Baker Hughes Inc. reported that the number of exploration rigs has dropped nearly 45%. And if prices continue to remain this low, you can bet we’ll see even more rigs going silent.

That means production is headed one way—much lower.

But his longer term prediction is not gloomy. He believes prices and production will start to improve in 2010 when an improving economy, more demand and less supply kick in. In the article he also offers his opinion on liquefied natural gas (LNG) imports, and his thoughts on which companies to invest in (EOG Resources is one of them). Read the whole article! It’s well worth it.

Based on Mr. Kohl’s views and other sources, this is Marcellus Drilling News’ take: If natural gas prices stay at or above $4/Mcf ($4 per thousand cubic feet), drilling will continue and slowly expand. That price level is just above break even for energy companies. If the price goes higher at $5-$6/Mcf, happy days are here again. If the price drops to $2/Mcf and stays there, production all but stops because energy companies will lose money.

Read the full article: The Inevitable Crunch in Natural Gas Supply… and How to Prepare Your Portfolio

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Downstate New Yorkers Demand Total Ban on Drilling in Upstate’s Marcellus Shale

Marcellus Drilling News sees a growing chorus of voices from New York City who believe the city’s water supply, 90% of which comes from the Catskill/Delaware watershed area in Upstate, is directly threatened by drilling activity in the Marcellus. And they are becoming vocal in their demands to stop the drilling before it even starts.

Some demand no drilling only in the watershed region itself (take note landowners in those counties). Others want a blanket ban throughout the state. From a recent article in The Villager covering a forum held in New York City:

Worried about an imminent threat to the Catskill/Delaware watershed, which supplies New York City with 90 percent of its water, Community Board 2 [C.B. 2] last week voted unanimously to demand a ban on drilling for natural gas in New York State.

And this:

“We can’t let the bad economy and people wanting to cash in on natural gas provoke wholesale drilling,” said Queens Councilmember James Gennaro at a March 18 forum held by the C.B. 2 Environmental Committee at Judson Church. “We can’t be the generation that loses New York City’s water supply to the lure of natural gas,” said Gennaro, who is a trained geologist.

Gennaro is the sponsor of City Council legislation calling on the state Legislature, the state Department of Environmental Conservation and Governor Paterson to prohibit drilling for natural gas within the watershed’s boundaries in Delaware, Greene, Ulster and Sullivan Counties.

The article quotes a parade of officials and heads of environmental groups in NYC that are opposed to any and all drilling in New York. Will the growing chorus of protests make a difference? Perhaps. Landowners need to make their voices heard just as loudly to counter the din that will come from Downstate. Contact Governor Paterson and your state representatives in the Assembly and Senate.

An aside: No one is in favor of contaminating the water supply, least of all our own! The issue of what chemicals are used and in what concentrations is an important one and must be dealt with fairly. Energy companies would do well to diffuse the issue by revealing at least general information about the chemicals they use. However, a blanket ban on all drilling is nonsensical. The problem is, there’s a lot of nonsensical things that happen in our great state. So we must be vigilant to protect our rights as landowners. Let’s not let “the mob” (little “m”) dictate what we can and cannot do with our land. We still have a (precious) few rights left, among them the right to own property. We can protect the water supply and still drill safely in the Marcellus. Let’s figure it out.

Read the full article: No fracking way! C.B. 2 forum warns about water

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Lackawanna College Predicts 90,000 New Jobs from Marcellus Drilling, Offers New Degree in Oil & Gas Production Technology

It seems drilling in the Marcellus is not only good for landowners and energy companies, but also for education and jobs. From an article published on iStockAnalyst (reprinted from The Daily Review, Towanda, PA):

Lackawanna College will begin offering an associate’s degree this fall in natural gas technology to prepare students to work in the growing local natural gas industry, and many of the required courses for the degree will be offered at the college’s Towanda Center.

In addition, Lackawanna College will soon start giving accounting students at the college’s Towanda Center the option of customizing their degree to prepare them to work in the accounting side of the natural gas industry, said Larry D. Milliken, director of energy programs at the college.

And the college is in the process of contracting with Sage Technical Services of Vestal, N.Y., so that its Towanda Center can again offer training to students who wish to obtain a commercial driver’s license, as there will be a large number of trucks required when drilling for gas, he said.

And this on the number of new jobs that will be created from Marcellus drilling activities:

“Development of the Marcellus Shale gas is expected to generate over 90,000 jobs over the next 20 years,” states a press release from Lackawanna College, which this week announced the launching of the natural gas technology program. “This kind of job growth and economic stimulus to northeastern Pennsylvania will be transforming to our region and to the lives of those people who get the technical education and training needed to take advantage of the best job opportunities as they arise.”

The new applied science degree in Oil and Gas Production Technology will be available at the college’s main campus in Scranton, and some of the other satellite locations, in addition to Towanda.

For more information about the new program, read the article Lackawanna College to Offer Natural Gas Technology Degree, read Lackawanna College’s news release, or contact Lackawanna College’s Department of Continuing Education at (570) 961-7883.

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West Virginia DEP Wants Your Comments on Water Use in Marcellus Drilling

From an article in the Charleston Daily Mail (obviously adapted from a press release):

CHARLESTON, W.Va. — The state Department of Environmental Protection announced it is seeking public comment on a draft document that addresses drillers’ water use and disposal in the Marcellus Shale formation.

Department secretary Randy Huffman said in a prepared statement, “New advancements in drilling technology have created increased interest in exploring the Marcellus Shale formation in New York, Pennsylvania, and recently in West Virginia. What we are concerned about is the increase in the amount of water used and the disposal of wastewater that results from using these new drilling techniques.”

The department will accept comments about the document until April 17. The document can be viewed online at www.wvdep.org/marcellusguidance. Comments about the draft can be submitted by e-mail to DEP.Comments@wv.gov or mailed to the Public Information Office at 601 57th Street SE, Charleston, WV 25304.

Make your voice heard! You have until two days after tax day to comment.

Direct link to the draft document: www.wvdep.org/FrontNews/Marcellus Guidance Document.pdf

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Three Jay Township Supervisors Reject Access to Water for EOG Resources

Three Jay Township supervisors have voted to deny access to water to EOG Resources for drilling in Elk County, Pennsylvania. EOG had requested access to the Bennetts Branch of the Sinnemahoning Creek by driving across township-owned land, specifically near a ball field.

According to the Courier-Express/Tri-County Sunday (DuBois) newspaper:

During Thursday’s Jay Township Supervisors meeting, the supervisors said they would not give EOG permission to use township land to access the stream because they still have a lot of unanswered questions.

EOG wants to withdraw the water for gas drilling in the Marcellus Shale, Supervisor Murray Lilley said.

Since October or November 8, the township has received three requests to withdraw water from various streams in the township, Supervisor Bob Coppolo said.

In each case, a letter was written by the supervisors to the Susquehanna River Basin Commission and copied to elected officials and the Department of Environmental Protection expressing concern.

The township is concerned about having water trucks going in and out of a recreation area where youth gather and play.

There are also questions of if the township would be liable if anything happens since it would be on township property.

And this interesting comment:

Asked by a resident if the township had to allow the company access to the stream, Coppolo said, “It’s our property.”

Although it is a favorable time economically to have this type of work, it is also important to preserve the community and the beauty of the area, he said.

Marcellus Drilling News thoughts: Hopefully Supervisor Coppolo means “our” as in the people of the township and not the private fifedom of he and his fellow supervisors. We encourage Supervisor Coppolo to talk with ALL of the people in the township, including landowners who have leased their property for drilling.

Read the full article: Township denies request to access water

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Is Drilling in the Marcellus Forcing Land Prices Higher?

The Centre Daily Times (State College, PA) implies that a recent auction of property in Centre County which had been seized for tax liens had higher than expected prices due to drilling in the Marcellus. The article begins thus:

BELLEFONTE — Property at Wednesday’s Centre County auction started selling at $1,000, but it didn’t take long for bidding on the first piece of land to reach $82,000.

Ditto for the next few parcels — all large pieces of Snow Shoe Township property in the Marcellus Shale natural gas region.

“Do I hear $150,000?” asked Chuck Salvanish, who works in the county tax assessment office and doubled as an auctioneer at Wednesday morning’s lien-free property sale in the county Courthouse Annex.

The winning bid on one 264-acre property quickly reached $300,000. Altogether, the sale brought in about $509,000, and drew upward of 100 people…

“I’m amazed at how many people are here,” said Sue Crowley, of Howard Township.

And this:

[Bill] Shreffler bid on a 76-acre Carlin Inc. property in Snow Shoe Township, but stopped at $49,000. The winning bid was $50,000.

Tarry Bratton, of York County, bid $20,000 for 163 acres of Carlin Inc. property in Snow Shoe Township that had at one time been a landfill.

I don’t live anywhere near Centre County, so I don’t know if those prices are high or not. How about you? Have land prices climbed in your area because of the Marcellus and the prospect of drilling? If they have (or haven’t), leave a comment.

Read the full article: County gets $509,000 in auction of property

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Centre Daily Times Runs Anti-Marcellus Editorial

The Centre Daily Times (State College, PA) recently ran an editorial with typical scare-tactic, kindergarten logic, while at the same time supporting the obscene taxation of drilling in the Marcellus in Pennsylvania.

The editorial recounts how a number of so-called conservation groups have their greedy hands out and want a piece of the pie (my words, not theirs). So in the tortured logic of these groups, they want to tax tax tax the Marcellus. On one hand conservation groups and the Centre Daily Times decry drilling and paint a nightmarish picture of water and noise pollution, road damage, and general malaise. In the next breath they say, “Oh well, if it’s gonna happen, let’s at least grab a piece of the action for ourselves.” It’s thuggish thinking and thuggish behavior. A protection racket–pay to play. And newspapers like the Centre Daily Times fall right in line, along with their Democrat co-conspirators in Pennsylvania state government.

Perhaps this is a teachable moment? The taxarati (the taxing class), will tell you energy companies will have to pay the tax, and that there’s more than enough money going around that “a little tax won’t hurt anyone,” with the justification that “39 other states do it too.” Wrong. Natural gas prices have come down dramatically in the past 12 months and new exploration is at best a break-even affair at this point.

Point #1: Drilling will slow or stop. Making drilling more expensive by adding more tax may tip the scales and make it an unprofitable venture, and the drilling will stop. There are already indications that new drilling has slowed throughout the Marcellus.

Point #2: Landowners will not escape the tax. Do you think energy companies alone will bear the tax? Wrong! Landowners will also be part of this tax. The energy companies will not bear the burden alone. More tax means less in landowners’ pockets.

Point #3: Consumers will ultimately pay. Do you think corporations simply “live” with making smaller margins of profit? They do not. They pass along increases in higher prices. There truly is no such thing as a tax increase on business that is paid by anyone other than the consumer. It is always the case. You may think you’re “soaking the rich” by increasing taxes on businesses, but those taxes are treated as a cost of business and factored into the price consumers will pay. By taxing business, you have just taxed yourself. Doh!

Wake up PA, and reject the notion of a severance tax on Marcellus drilling.

Read the Centre Daily Times editorial: Tax the source of the mess

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Central New York Starting to Heat Up with Marcellus Drilling

A recent article published in The Oneonta Star covered two gas drilling “forums” that were conducted in Otsego County by the anti-drilling group Sustainable Otsego. The article is a lazy, biased view of a complicated issue–but there’s no surprise there. The mainstream media is not an impartial, investigative source of information as it once was. For example, the “reporter” didn’t bother to interview people attending the forums, but instead interviewed the people presenting the biased material. Go figure.

Amidst the standard talking points and mountain of…(ahem) less than objective information (ahem)…in the article, are a few nuggets of useful intelligence on drilling activities in the central region of New York State. Forthwith:

According to geologists, Otsego, Delaware and Chenango counties are potentially rich in gas deposited in the Marcellus Shale formation below ground. Groups representing landowners and gas company representatives have said the findings may make some landowners wealthy.

On how much land has been leased in Otsego County:

The Otsego County Conservation Association reports that 8.7 percent of acreage in Otsego County is leased for natural gas drilling, according to a media release from the group issued Monday. The rate is up from 7 percent reported previously by OCCA.

OCCA said since the beginning of the year, an additional 204 parcels have been signed, totaling 12,190 acres. Parcels now under lease contract number 839, with total acreage rising to 54,443 acres.

And on test wells:

Test wells several thousand feet deep have already been drilled in Springfield and Cherry Valley.

And this on applications for new drilling:

The DEC has received 31 applications for horizontal drilling wells, [Yancey] Roy [DEC spokesman] said, and the breakdown by county is Delaware 23; Tioga, four; Chenango two, and Chemung, two.

Read the full article: Gas drilling forums wrap up

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Pennsylvania Democrats Still Hell-bent on Taxing Natural Gas

The Scranton Times-Tribune reports that Pennsylvania Democrats, including Gov. Ed Rendell, are on a mission to tax natural gas drilling in the Marcellus. Let’s name some names, shall we?

House Finance Chairman David Levdansky, D-39, Pittsburgh, and Environmental Resources Chairman Camille George, D-74, Houtzdale, joined with statewide conservation groups Monday to widen the debate over proposed state taxation of natural gas produced by drilling deep pockets in the Marcellus Shale formation, underlying much of western and Northeast Pennsylvania.

Gov. Ed Rendell has proposed a 5 percent severance tax in hopes of generating an estimated $107 million for state coffers. The tax would be levied on the value of natural gas at the well.

Not to be outdone by the government, the so-called conservation groups have their hands out too:

The conservation groups, including PennFuture and Pennsylvania Federation of Sportsmen’s Clubs, say some of that revenue should go for conservation projects, the state Game and Fish and Boat Commissions and to help local governments repair roads.

The coalition isn’t suggesting a specific amount at this point, said Andy Loza, an official with the Pennsylvania Land Trust Association.

And the pièce de résistance:

“Implementing a severance tax on natural gas is a no-brainer,” said Mr. George, who is drafting legislation to set standards for treating water used in drilling.

Taxing the fledgling PA gas industry into oblivion is a real no-brainer for those with no brains!

Read the full article: Shale tax ideas debated

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Susquehanna River Basin Commission Approves 26 Applications for Water Use

At a recent meeting of the Susquehanna River Basin Commission held in Scranton, PA, the group approved 26 applications to use water from the Susquehanna River watershed for drilling in the Marcellus Shale deposit. At the meeting, the Commission imposed new rules about posting signs at sites along rivers and creeks where water is drawn for use in drilling.

Among the permits approved by the commission, according to the Susquehanna Independent Weekend, is permission for ALTA Operating “to draw up to 3 million gallons per day from the Susquehanna River and 99,000 gallons per day from Snake Creek, both in Susquehanna County.”

Read the full article: New rules for gas drillers

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Europe Invests Heavily in American Natural Gas Drilling in the Marcellus, Details of Chesapeake/StatoilHydro Deal

The Fort Worth Business Press reports European companies are making major investments in American shale plays, including the Marcellus. The article reports the following details about Chesapeake Energy’s new partner Norwegian-based StatoilHydro:

Norwegian state-controlled energy company StatoilHydro would pay $3.375 billion for a 32.5-percent stake in [Chesapeake’s] 1.8 million net acres of Marcellus Shale assets, according to a November 2008 agreement. StatoilHydro paid $1.25 billion in cash at closing, and the remaining $2.125 billion over the next three years “by funding 75 percent of Chesapeake’s 67.5 percent share of drilling and completion expenditures until the $2.125 billion obligation has been funded,” according to the Nov. 11 statement.

“This deal adds a major building block to the gas value chain position we have established in the U.S., the world’s largest and most liquid gas market,” said StatoilHydro President and CEO Helge Lund in a statement. “This is a significant step in strengthening our U.S. gas position, building on our existing capacity rights for the Cove Point LNG terminal, our gas trading and marketing organization and the gas producing assets in the Gulf of Mexico.”

Read the full article: Europeans see benefits in U.S. shale