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    Are the Shale Cuttings Being Dumped at the Chemung County Landfill Radioactive?

    Part of the process of drilling a well includes disposing of the material that comes out of the well, including “cuttings” and mud—i.e., leftover dirt and rock. A “controversy” is brewing in Chemung County, NY where the county landfill is accepting cuttings from drillers over the border in the Pennsylvania Marcellus Shale. The problem? Sometimes shale cuttings have elevated levels of radioactivity. Those opposed to drilling are playing on people’s fear of the word “radioactive” hoping it will shut down the shipments of shale cuttings to the landfill. (Those shipments, by the way, are generating a nice revenue stream for Chemung County.)

    Anyone living in New York’s Southern Tier or Northeast Pennsylvania knows when buying a house you have the basement tested for radon—a naturally occurring radioactive gas that exists in high concentrations in some (not all) locations. Radon comes from the ground. Far below the ground radon gas exists, but also radium and even uranium. Radon and radium are both isotopes of decaying uranium. When you drill one to two miles under the earth, the cuttings that come out may have high concentrations of radioactivity (mostly radium). It’s not a good idea to dump highly radioactive material, naturally occurring or not, in a landfill. No argument on that count. But! What is a “high concentration?” Can it be treated if it is high? And, do cuttings usually have high radioactivity as a general rule?

    There is an easy answer here. Determine what levels are safe, and then test incoming loads of cuttings to be sure they don’t violate that standard. That’s just what Chemung County is in the process of doing. The system works—no one wants a health hazard for current and future generations.

    Read about the cuttings “controversy” here: Elmira Star Gazette (Mar 31) – Questions raised as landfill seeks to increase intake of Marcellus drilling waste

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    Will Gov. Paterson’s Political Troubles Delay Drilling in New York State Until 2011?

    Bloomberg, a left-leaning (anti-drilling) news organization published a story about the seemingly eternal question of “When will drilling begin in New York?” with reasoning that goes like this:

    (A) New York Gov. Paterson is more or less pro-drilling and wants to see it start soon.

    (B) Gov. Paterson has run into political troubles, “probes” of his conduct are ongoing, so he’s decided not to run for re-election. He’s damaged goods.

    (C) The Department of Environmental Conservation, fearing political turmoil and upheaval, and perhaps reprisals, will not go forward with drilling until after the election in November (at the earliest).

    The Bloomberg article gives some background details about drilling in New York State for those who are new to the debate—all of it with an anti-drilling flavor. But some good background details nonetheless. May be worth a read if you’re so inclined:

    Bloomberg (Mar 31) – Gas Drillers’ New York Hopes Fade on Paterson Woes

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    Six Short-Line Railroads in Central PA Report Business is Up 40 Percent Because of Marcellus Drilling

    MDN previously reported on two short-line railroads that have seen their prospects dramatically improve with Marcellus drilling activity in Pennsylvania—the Wellsboro & Corning Railroad and the Reading & Northern Railroad. You can now add six more short-lines to the list—all of them owned by the North Shore Railroad Company.

    A system of six railroads in northcentral Pennsylvania, including the Lycoming Valley Railroad Co., is enjoying a 40 percent increase in business over last year’s first quarter, said chairman and CEO Richard Robey.

    “We have seen a substantial increase in business related to the Marcellus Shale gas well drilling,” Robey said Wednesday.

    Before that, the recession had sliced the railroads’ business by nearly 20 percent, as it hauled fewer loads of iron and steel products and scrap, food stuffs and plastics to manufacturers, he said.*

    Once again the main product being hauled is sand, which is mixed with water and chemicals and injected into well bores as part of the process to free trapped natural gas from the shale.

    *Charleston Daily Mail (Mar 31) – Railroads booming with Marcellus Shale business

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    PA Oil and Gas Association, Independent Oil and Gas Association Merging into One Organization

    From the press announcement:

    WEXFORD, PA – The Pennsylvania Oil and Gas Association (POGAM) and the Independent Oil and Gas Association of Pennsylvania (IOGA) today announced they have unanimously voted to merge their organizations to create a single, comprehensive trade association representing oil and natural gas interests throughout Pennsylvania.  The new organization, named the Pennsylvania Independent Oil and Gas Association (PIOGA), will represent approximately 700 members, including oil and natural gas producers, drilling contractors and service companies, as well as various professional firms, individuals and royalty owners.

    “The Pennsylvania Independent Oil and Gas Association will draw upon the combined expertise of our independent associations to better serve the needs of our member organizations, which represent the leading oil and natural gas producers working in the Commonwealth,” said PIOGA President and Executive Director Lou D’Amico. “By joining forces as one, unified voice, we will expand our mission to achieve even greater success for our members, including our role as liaison with other associations, companies, government and regulatory agencies to foster proactive communication, regulatory and policy development, work force and safety training, and continued education and growth within all segments of the industry.”

    PIOGA will be based in Wexford, Pa. and will employ a five-person staff, responsible for planning and implementing the association’s mission. In addition, PIOGA’s merged 29-member board will provide oversight, as well as govern the strategic planning and direction of key deliverables, while various committees oversee transportation, safety, environmental, and exploration and production initiatives. PIOGA will host an annual meeting, a large-scale conference and trade show, as well as yearly industry seminars, public educational meetings, and community events.

    “This merger is an important milestone in leveraging the industry’s common goal to operate under a unified framework that advances the responsible exploration and production of both the Marcellus Shale and other oil and gas producing formations throughout the Appalachian Basin,” said current POGAM Chairman Frederick Fesenmyer. “The entire industry is experiencing unprecedented growth, and the importance of a united, cohesive industry and community advocate cannot be overstated.  PIOGA will equally represent all facets of Pennsylvania’s oil and natural gas industry.”

    “We look forward to working closely with other states’ associations to collaborate on key initiatives that advance the industry and ensure the responsible development of our region’s promising domestic energy resources,” said current IOGA Chairman Craig Neal.

    The PIOGA board of directors will meet on April 1 to determine the structure and officers of the new association.

    *Pennsylvania Oil and Gas Association (Mar 30) – Members give unanimous approval to merge PA’s historic, independent oil and gas advocacy groups

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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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    Not All Chenango County, NY Landowners will Benefit from Marcellus Shale Drilling

    The Chenango County (NY) Natural Gas Advisory Committee views drilling in the Marcellus Shale as a reality, not a “far off fantasy” that a recent string of articles in the Binghamton Press & Sun-Bulletin (from neighboring Broome County, NY) seem to indicate. Good for Chenango County. They’re researching and planning, and they will be ready when drilling begins.

    But it seems only the southern parts of Chenango County would be suitable for drilling. Some interesting details (if you’re a landowner in Chenango County) from a recent article:

    As far as Chenango County is concerned, when it comes to exploring the natural gas-rich Marcellus Shale, energy companies won’t be as interested in the northern half of Chenango County because the formation there is much too shallow. Geologists say the Marcellus lies only 2,000 to 3,000 feet deep north of the town lines of Smithville, Oxford and Guilford versus more than 4,000 feet deep below the demarcation.

    Hydraulic fracturing, the controversial technique used to extract natural gas from fissures in organic rich black shale, simply won’t work in formations less than 4,000 feet, and is more likely in depths almost twice that amount.*

    MDN points out that hydraulic fracturing is only controversial because anti-drillers make it so. The practice has been around for years (since the late 1940s). So has horizontal drilling. The “new” thing is combining the two together—but even that has been around for years.

    Landowners in Chenango County will need to figure out if their land is suitable for drilling. Consult with local landowner groups, and with the County Natural Gas Advisory Committee.

    *Norwich Evening Sun (Mar 30) – Planning for Marcellus Shale activity is ‘a reality’

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    PA Marcellus Shale Coalition Responds to Gov. Ed Rendell’s Fibbing

    It seems that someone in Pennsylvania Gov. Ed Rendell’s office is telling fibs about the Marcellus Shale industry (say it ain’t so!). The PA Marcellus Shale Coalition has issued a statement to “set the records straight.” Forthwith:

    CANONSBURG, Pa. – Marcellus Shale Coalition President and Executive Director Kathryn Klaber today issued the following statement in response to claims that the natural gas industry declined a meeting requested by Governor Ed Rendell to discuss state policy issues:

    “It is important that the Marcellus Shale Coalition clarify the record regarding a meeting planned among industry representatives, Gov. Ed Rendell and other groups, scheduled for the morning of January 19, 2010. The industry did not decline the Governor’s request for a meeting. In fact, invited CEOs went one step further and requested that every member company of the MSC’s Executive Committee and their representatives participate in the meeting along with leaders of the Pennsylvania House and Senate in order to make real progress on the opportunity natural gas presents for the Commonwealth. The MSC team was en route to this scheduled meeting when we were notified by the Governor’s office that the meeting had been canceled due to an emergency trip to Haiti that demanded the Governor’s attention. We regret that the meeting didn’t take place, but understand that he needed to make relief in Haiti his priority that day. In addition, we have clearly indicated our willingness to meet with all engaged stakeholders, including Senate and House leadership, to discuss upcoming policy and legislative issues in the Commonwealth. In fact, our industry reiterated this commitment in a February 9 press statement.

    “The Governor has also made reference to public opinion regarding our industry. Our research and observations in the communities where we do business shows that support for our industry continues to grow. Just last week a poll released by a leading Pennsylvania newspaper found that most Pennsylvanians do not support the Governor’s proposed severance tax, which would be the highest in the nation for shale gas producing states. Tens of thousands of Pennsylvanians have become partners in the development of our vast natural gas resources by actively signing leases with natural gas producers. Natural gas producers receive requests daily from interested landowners who have not yet signed a lease. Our industry has paid more than $4 billion to landowners in the form of lease and royalty payments, and those numbers will only increase. Thousands of Pennsylvanians are working in the gas industry today, and workforce development programs are expanding across the Commonwealth. Most importantly for the Governor to observe is the $1 billion in total state and local tax revenue that this still-growing industry will create in 2010.

    “All of this positive economic activity for Pennsylvanians is taking place at a time when producers will not recover these significant investments for several more years. This is just the beginning and we must work together to maximize the opportunity for the betterment of all Pennsylvanians.”*

    *Marcellus Shale Coalition (Mar 30) – Marcellus Shale Coalition Releases Statement to Set the Record Straight on January Meeting with Gov. Rendell

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    Citizens Committee in Mt. Pleasant, PA Draft Drilling Ordinances for Their Community

    A citizens committee in Mt. Pleasant Township, PA (Washington County) has developed a draft zoning ordinance that will dictate what drillers in their township can, and cannot, do. From a news article:

    The citizens advisory committee presented a final draft on its proposal for a zoning amendment governing oil and gas activities.

    The committee, headed by Dencil Backus, is made up of about a dozen residents who have studied other zoning ordinances to find suitable regulations that would address the activity in Mt. Pleasant. They have looked at ways to address noise, light, odors and buffers in addition to where certain activity can take place.

    In studying the matter, the committee has taken the approach that gas drilling into the Marcellus Shale should take place but not at the expense of the landowners, township or residents’ quality of life.

    The rough draft still has to be reviewed by the supervisors and solicitor. From there, [Township Supervisor Larry] Grimm said, it will be passed on to the township and Washington County’s planning commissions for their approval.*

    *Pittsburgh Observer-Reporter (Mar 24) – Meeting recap

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    Mesa Energy Adds Another New York Heavyweight Politico to Advisory Board

    Mesa Energy, with drilling operations in Western NY, continues to add major firepower from New York’s political class to their advisory board. Previously it was former New York Gov. George Pataki (see this post). Today, Mesa has added former NY State Senator Nicholas Spano to the board. Mr. Spano knows the people, and the system in Albany, and he will no doubt help Mesa navigate the rough regulatory seas once horizontal drilling is approved in New York.

    From the press release on Mesa’s website:

    Dallas, TX – Mesa Energy Holdings, Inc. (the “Company”) (OTCBB: MSEH.OB), an exploration stage oil and gas exploration and production company with a focus on the Marcellus Shale in western New York, announced today that Nicholas A. Spano, former New York Senator, has been named to the Company’s Advisory Board. Senator Spano brings to the Company over 27 yeas of experience as a New York political leader and advocate for New York related matters.

    “We welcome Senator Spano to our Advisory Board," said CEO of Mesa Energy Holdings, Inc., Randy M. Griffin. "With his strong background as a former New York State Senator and Assemblyman, he is a recognized authority in political issues. His support and guidance will be invaluable."

    "I look forward to providing Randy with support and strategic guidance as he commences drilling activities in western New York," said Nicholas A. Spano. "With the Marcellus Shale in our backyard, there are great opportunities for the State to benefit from the Company’s activities. The Company intends to develop and produce natural gas in western New York which can potentially provide the local region with new jobs, tax dollars and a supply of natural gas."

    As New York State Assemblyman (between 1979 and 1986), Mr. Spano served as chief executive of the Office of General Services (OGS), a large State agency that provides a broad range of support services that facilitate the operations of State government and that assist local governments, public authorities, public and private agencies. He ensured OGS provided government and nonprofit agencies with innovative solutions, integrated service, and best value, enabling the State of New York to function optimally.

    In 1986, Mr. Spano was elected to New York State Senate as Senior Assistant Majority Leader. He also held various positions including Chairman of the Senate’s powerful Committee on Investigations and Government Operations; and Chairman of the Committees on Labor, Mental Health and Developmental Disabilities. Senator Spano represented District 35 in the New York State Senate until 2006.

    Since retiring from the New York State Senate in 2006, Senator Spano has maintained his vast network of relationships with New York political and business leaders. Today he serves as president of Empire Strategic Planning, an experienced lobbying and government relations firm specializing in state and local advocacy in New York. He is also an Executive Director of Rand Commercial Services, a full service real estate financial institution with expertise in commercial and investment real estate.

    Senator Spano is a member of the Richmond Children’s Center, Westchester Mental Health Association and Enrico Fermi Educational Foundation. He received a B.A. in Political Science at Iona College in New Rochelle, New York.

    Mesa Energy (Mar 26) – Mesa Energy Holdings, Inc. Names Nicholas A. Spano, Former New York Senator, to the Advisory Board

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    Another Cool Idea from Kane, PA – Turn Old Schools into Marcellus Shale Training Centers

    Must be something in the water in Kane, Pennsylvania. They just keep having great ideas! Not long ago we learned that the Kane Borough Sewer Authority is going sell (for money!) sewer water to drillers in the Marcellus, which will create a nice, new revenue stream for the township. Now they’re talking about possibly converting empty school buildings into training centers for those who will need job training to work in the Marcellus Shale.

    With Kane located in the middle of a key Marcellus Shale gas location, could its vacant schools provide sites for training or other services for the well-drilling bonanza?

    This question was explored Thursday by the Ad Hoc Committee that is looking at options for utilizing the vacant Mt. Jewett Elementary School and the soon-to-be vacant Chestnut Street Elementary School in Kane.

    Dr. Maryann Anderson, superintendent of the Kane Area School District, said the companies involved in drilling Marcellus Shale gas wells “need to have a ready workforce.”

    It was suggested that perhaps the vacant schools in Kane and Mt. Jewett could house training centers for the companies that need workers for various jobs associated with the Marcellus wells.*

    The great ideas just keep coming—from Kane!

    *The Kane Republican (Mar 26) – Could schools provide services for area drilling boom?

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    Another Short-Line Railroad Revived by Marcellus Shale Drilling

    Chalk up the resurrection of another short-line railroad to drilling in the Marcellus Shale. As MDN previously reported, the Wellsboro & Corning Railroad tripled its cargo traffic in just a few short years from drillers who need carloads of sand. We now have word of a rail line brought back from the dead in Luzerne County, PA due to Marcellus drilling activity:

    DURYEA – Investment spurred by Marcellus Shale natural gas exploration has transformed an antiquated, weed-ridden rail yard just north of Pittston into a state-of-the-art transloading terminal teeming with rail and trucking activity on an almost daily basis.

    Over the last year, Reading & Northern Railroad Co. sunk $100,000 into Pittston Yard, laying new track to accommodate 100 new rail cars and constructing a facility to store and hold up to 800 cars of sand to be used in hydraulic fracturing, or “fracking,” operations at Marcellus Shale drill sites throughout Northeastern Pennsylvania, said Reading & Northern President Warren A. Michel.

    “The reason for our success is that we are the largest facility in the region capable of handling hundreds of rail cars of sand. We now have 130 (sand) rail cars at the yard and we’ll be expanding substantially over the next six months,” Michel said.*

    *Wilkes-Barre Times Leader (Mar 26) – Old Duryea railroad yard taking on new life

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    Statoil Takes Over Another 59,000 Acres from Chesapeake, Pays $4,325 Per Acre

    Norwegian energy giant Statoil, which has a deal with Chesapeake Energy to develop some of Chesapeake’s acreage in the Marcellus Shale, has just transferred 59,000 acres from Chesapeake’s lease holdings to their own.

    From a press statement issued by Statoil on Friday, March 26:

    Statoil has signed an agreement with Chesapeake which will add approximately 59,000 net acres to Statoil’s current 600,000 net acre positions in the Marcellus Shale.

    The cost to Statoil of the transaction is $253 million, with an average acreage cost of $4,325 per acre.

    As part of Statoil’s joint venture agreement with Chesapeake in 2008, Statoil has the right to periodically acquire its share of leasehold that Chesapeake continues to acquire in the Marcellus Shale. Statoil has now exercised such acquisition rights on a series of Chesapeake Marcellus Shale acquisitions.

    Statoil has seen very encouraging production performance since the entry into the Marcellus play in late 2008. This new acreage is expected to strengthen the position of Statoil and our cooperation with Chesapeake as the largest lease holders in one of the most prospective US shale gas plays.

    This acquisition will enable the partnership to optimize its development activity and secure additional developments in the play. Statoil expects to continue to grow its Marcellus position together with Chesapeake.

    Andy Winkle, VP for the Marcellus Asset, says “We were an early mover into the Marcellus and we will continue to build a long term position in what we expect will become a legacy asset and reach our goal of 50,000 boepd production by 2012.”

    *Statoil Website (Mar 26) – Statoil strengthens US shale gas position

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    Binghamton Press & Sun-Bulletin Runs Wall-to-Wall Coverage of Marcellus Drilling Debate

    The Sunday, March 28 Binghamton Press & Sun-Bulletin (Broome County, NY) devoted a number of pages to the issue of drilling in the Marcellus Shale. The chief writer for the P&SB on these matters, Tom Wilbur, is anti-drilling, and it shows in his articles. As people on the anti-drilling side of the debate often do, they resort to unsubstantiated “facts” and vague nightmare scenarios. Today’s articles were no exception.

    On the front page we have the following articles:

    Marcellus Shale: Is it safe to drill?
    An abridged (and mostly one-sided) history of the shale gas drilling debate in the Southern Tier region of New York and Northeastern PA. Wilbur identifies some of the issues being debated, with the obligatory mention of Dimock, PA and the the isolated (only?) case of a driller who didn’t follow procedure and methane (not chemicals, but natural gas) migrated into drinking water supplies for 12 families. Dimock is the rallying cry for many who oppose drilling. He ends the article with the vague threat that anti-drillers will tie up the right to drill with legal harassment for as long as they possibly can. I believe him on that one.

    Landowners face fight over NYC watershed
    Politicians in New York City are making political hay out of the prospect of drilling with statements that drilling anywhere in the Catskill watershed area must be prevented at all costs because if the water supply for NYC is contaminated, they would have to install filters costing into the billions. The politicians from NYC want horizontal drilling banned in New York State as a preventative measure. And they’re threatening to tie up drilling with lawsuits. No one wants to pollute the City’s water supply! And no one will. What’s conveniently left out of the story by Wilbur is the fact that there is only one company, Chesapeake Energy, with any leases signed in the watershed, and that’s for 5,000 acres. Oh, and Chesapeake voluntarily said they would not drill in the watershed.

    Read More “Binghamton Press & Sun-Bulletin Runs Wall-to-Wall Coverage of Marcellus Drilling Debate”

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    Binghamton Natural Gas Summit: National Association of Royalty Owners Executive Director Jerry Simmons

    Jerry Simmons, NARO Jerry Simons was the final presenter at the March 18 Binghamton Natural Gas Development Summit. He is the executive director of the National Association of Royalty Owners (NARO). According to Mr. Simmons, NARO is the only organization to represent landowners that is completely independent and not attached to energy companies in any way.

    NARO was founded in 1980 after the “windfall profits tax” was passed by the 96th Congress, a 35 percent tax on oil royalties. NARO fought against the tax, and it was eventually repealed in 1988.

    NARO is an educational and advocacy group, chartered as a 501(c)3 and 501(c)6 non-profit organization. There are state chapters of NARO. New York and Pennsylvania fall under the Appalachia Chapter which covers the Mid-Atlantic and Northeast areas of the country.

    As an example of what NARO does for royalty owners: Mr. Simmons said the Depletion Tax Allowance, part of federal law since the 1920s, is under assault by the Obama Administration. They tried to take the allowance away last year but were unsuccessful. They are trying again this year, as part of the 2011 budget. NARO is fighting against it. [MDN Comment: The Depletion Tax Allowance treats royalty owners as part owners of an asset, allowing them to “write down” the value of the asset as it is used up, in this case mineral deposits being the asset. Bottom line—if this allowance is taken away, taxes to the federal government go way up for royalty owners.]

    Read More “Binghamton Natural Gas Summit: National Association of Royalty Owners Executive Director Jerry Simmons”

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    Newfield Exploration Set to Drill 10 Wells in Wayne County, PA This Summer

    Drilling is coming to Wayne County, Pennsylvania this summer according to officials with Newfield Exploration. They are waiting for approvals from regulators to begin drilling up to 10 exploration wells. If those wells show promising results, they will likely be turned into full production wells.

    A Houston-based natural gas production company is laying the groundwork to fulfill its promise to drill up to 10 exploration wells in northern Wayne County this summer, with permits now trickling into the state Department of Environmental Protection.

    Newfield Exploration Co., which partnered with international oil and gas production firm Hess Corp. to develop a 140,000-acre leasehold in Wayne and Susquehanna counties, recently filed for its first four natural gas drilling permits in Damascus and Manchester Twps.

    The company has three pending drilling permits in Damascus Twp. [Wayne County] and one pending permit in Manchester Twp. [York County], according to state environmental regulator records. These permits, filed in late February and March, are on track to be approved by late April or May.*

    *The Scranton Times Tribune (Mar 24) – Gas driller seeks permits for Wayne County wells

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    Mesa Energy Fracking Two Wells in NY, Plans to Drill Additional 80 Vertical Marcellus Shale Wells in Java Field

    As MDN previously reported, Mesa Energy, which owns the Java Field in Wyoming County, NY, is planning to convert two of the 19 gas wells on the property from Medina sandstone wells to Marcellus Shale wells. These are already drilled, vertical wells. We now have more details about what Mesa plans to do with these two wells, and with the Java Field. They are moving aggressively with Marcellus Shale gas using vertical drilling, giving them a head start on other energy companies.

    From a press release by Mesa Energy issued today:

    Mesa Energy Holdings, Inc. (the “Company”), an exploration stage oil and gas exploration and production company with a focus on the Marcellus Shale in western New York has announced that it has begun initial testing in its Java Field natural gas development project in Wyoming County, New York.

    The Company has selected two of its nineteen existing Medina wells for testing of the Marcellus Shale. The two wells selected are approximately three miles apart. The testing process began in December 2009 with an initial round of location maintenance, logging and evaluation and the two wells will be re-completed once the required permits have been approved. The data obtained in December 2009 will be combined with additional data to design a frac program for both wells with these operations expected to be completed in the second quarter of 2010.

    The Company believes that there are multiple stacked pay zones present in the field, including the Medina and Marcellus Shale zones and, possibly, the Utica Shale zone, and that there is also significant potential to enhance the production and lifespan of the existing Medina wells using modern technology.

    The Company recently announced the results of an independent engineering review of its material assets in the Java Field. Based on this review, as modified by the Company to better reflect the actual acreage acquired, the potential gas in place in the Marcellus and associated shales is believed to be in a range from 106 billion cubic feet (BCF) at 50 feet of shale thickness to 425 BCF at 200 feet of shale thickness. Based on these numbers, potential recoverable gas reserves using a 25% recovery factor and 200 feet of shale thickness would be approximately 106 BCF. The Company projects total potential net revenue over the life of the project to be as much as $405 million gross before expenses, or $332 million net of expenses ($151 million at PV 10). These projections are based on a price of $5 per thousand cubic feet (MCF) of gas.

    CEO of Mesa Energy Holdings, Inc., Randy M. Griffin said, “The test results from the first two wells will be an integral part of our evaluation to determine the potential production capability of additional existing wells in the Marcellus Shale. We have already submitted permit applications and expect to receive approval shortly. We will update our shareholders on our progress.”

    The Company believes that, in addition to enhancing its existing 19 wells, it can potentially drill and complete up to 80 new vertical Marcellus Shale wells on the project acreage and that the shales in the Java Field and surrounding area could provide an excellent opportunity to achieve significant daily production rates.

    *Business Wire (Mar 25) – Mesa Energy Holdings, Inc. Announces Initial Testing in the Java Field