Posts Tagged ‘Calgary’

People are wondering just what EnCana will bring to Marcellus Shale drilling.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

Edward Buda had been dealing with representatives of Whitmar Exploration Co. for about two years since he, his late brother and sister-in-law negotiated a lease with the company for natural gas drilling on their Fairmount Township property.

Now, there’s a new player in the mix, since Whitmar announced a partnership with EnCana Oil & Gas (USA) Inc. in November for a joint venture in drilling and development of the Marcellus Shale in Luzerne and Columbia counties.

Like others in the Back Mountain, Sweet Valley and Red Rock areas, Buda is a bit wary of the Denver-based energy company.

“We did business with Whitmar. How (Encana is) going to be, I don’t know. How they honor the contract, that’s to be seen. I still don’t know much about them,” said Buda, 75, who lives in Ross Township.

Buda’s brother Walter and Walter’s wife Eleanor signed a fairly simple three-page lease with Whitmar in February 2009, a month before Walter died. Eleanor passed away in November, Edward said, and he became the new lease holder just as EnCana came into the picture.

Now, EnCana wants to lease Edward’s property in Ross Township, but he isn’t too impressed with the $1,000-per-acre offer. And the 16-page lease proposal that has undergone many revisions is written in legalese, he said.

“They wanted to put a drill pad on my property (in Ross Township). I said I want to wait and see what happens in Red Rock (section of Fairmount Township). Everybody’s waiting to see whether it’s going to be a gusher or a fiasco in Red Rock,” Edward said.

Wendy Wiedenbeck, a public and community relations adviser for EnCana, said the well on Buda’s property and a second well planned for a Lake Township property owned by township Supervisor Amy Salansky and her husband, Paul, are exploratory ventures.

If those wells produce an acceptable amount of natural gas, EnCana will develop a plan for expanded drilling operations in the area, Wiedenbeck said. Drilling is expected to begin in July on Buda’s property and gas production should start by October. Clearing of an access road to the site began last week.

Company has won honors

For the past few months, Wiedenbeck has been the face of EnCana locally, arranging and attending meetings with people who live or own property within a mile of the planned drilling sites as well as attending meetings with local groups concerned about drilling activity in their communities.

A self-described “Army wife” with two sons – one in first grade, the other a senior in college, Wiedenbeck has lived in Colorado since 1989 and has been working in community/public relations since the early 1990s. She’s been with EnCana for five years.

“They’re a cultural fit for me. I believe they truly believe in responsible development,” Wiedenbeck said of her employer.

To prove her point, Wiedenbeck provided a long list of awards EnCana has received over the past few years. Just a few include:

• The 2008 U.S. Environmental Protection Agency Natural Gas STAR award, recognizing outstanding efforts to measure, report and reduce methane emissions;

• Interstate Oil & Gas Conservation Commission Chairman’s Stewardship Awards, recognizing exemplary efforts in environmental stewardship by the oil and natural gas industry;

• The 2009 Colorado Oil & Gas Conservation Commission Award for Courtesy Matters program in the Denver-Julesburg Basin surrounding Erie, Colo.

“Courtesy Matters” is EnCana’s community engagement program that brings EnCana staff and third-party contractors together with the community to discuss the nuisance issues associated with company operations,” Wiedenbeck said.

“Courtesy Matters creates a working environment where open and ongoing dialog are paramount. Discussions generally include concerns with traffic, noise and dust associated with our operations,” she said.

Community investment vital

Marty Ostholthoff, community development director for Erie, Colo., said in a teleconference that EnCana is one of four major energy companies drilling in the Denver-Julesburg Basin, the others being Noble Energy Inc., Kerr-McGee Corp. and Anadarko Petroleum Corp.

Fred Diehl, assistant town administrator in Erie, said he would be remiss if he didn’t point out “how far ahead of the other operators EnCana is” when it comes to community investment.

Diehl said he mentioned to Wiedenbeck that officials wanted to install solar panels on a new community center being built, and EnCana donated $250,000 to make that happen. A month ago, the company donated $175,000 for eco-friendly lighting at community ball fields.

“It’s not a requirement that they make notifications to our residents (about drilling activities or problems), but they do. It’s not a requirement that they make financial investments into our community, but they do,” Ostholthoff said.

Of course, there’s a downside to the presence of the drilling companies in the suburban area, which lies in one of the largest natural gas fields in the country, Diehl said.

“These things are still loud,” he said of the drilling rigs. “People come into our offices complaining, ‘We can’t sleep.’ But we worked with the operators to put up hay bales and cargo trailers to minimize the noise. The only good thing is, (the drilling is) temporary.”

As far as addressing concerns of residents, Diehl said all of the companies seem willing and responsive. “If they’re not, one of them can give the whole industry a black eye,” Diehl said.

Wiedenbeck said EnCana will have a toll-free number posted at its drilling sites that people can call to report concerns. Callers who choose the Pennsylvania prompt will be automatically directed to her office or cell phone. An operations phone number also will be established, she said.

And while EnCana will hire someone locally to help with community relations efforts, Wiedenbeck said she will continue to be “that face” for the community. She has spent about half her time in Pennsylvania since EnCana partnered with Whitmar, sometimes bringing her youngest son, Sammy, on trips here.

“He loves Pennsylvania,” she said.

Steve Mocarsky, a Times Leader staff writer, may be reached at 970-7311.

Copyright: Times Leader

75 percent of gas production workforce composed of unskilled, semi-skilled jobs.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

If natural gas production from the Marcellus Shale is as successful as energy companies and landowners hope, the companies likely will need to hire more employees to man wells, perform testing for and oversee the drilling of new ones and monitor their operations.

“The jobs associated with natural gas drilling are well-paying jobs,” said Doug Hock, spokesman for Calgary-based Encana Energy, which has its U.S. headquarters in Denver, Colo.

Salaries even for less-skilled positions generally range between $60,000 and $70,000, Hock said.

The types of company jobs that usually become available when drilling operations are successful include drilling engineers, geologists and geophysicists and permitting experts. Pumpers, employees who check wells on a regular basis for proper operation, will be needed after more wells are drilled, Hock said.

Other positions with energy companies include experts in land negotiations and in community relations, he said.

Rory Sweeney, spokesman for Chesapeake Energy, said the Oklahoma City, Okla.-based company currently has 1,032 employees working in Pennsylvania, up from 215 in January 2009.

Local employment

As far as local employment, Sweeney said 168 employees report to local offices, “but we have more than 1,000 statewide and most of them are working rigs in NEPA.”

Types of workers expected to be hired include welders, rig hands, production workers, engineers, drilling and land technicians, pipeline field staff, construction field staff, administrative support and dozens of other occupations.

Last summer, the Marcellus Shale Education and Training Center at the Pennsylvania College of Technology conducted a Marcellus Shale Workforce Needs Assessment study that looked at potential workforce needs in two tiers of Pennsylvania counties – the northern tier, which borders Luzerne County to the north, and the central tier, which borders Luzerne County to the west.

The northern tier includes Wyoming, Sullivan, Susquehanna, Bradford and Tioga counties; the central tier includes Clinton, Centre, Columbia, Montour, Northumberland, Union, Snyder, Lycoming and Mifflin counties.

The study found that the direct workforce needed to drill a single well in the Marcellus Shale region is comprised of more than 410 individuals working in nearly 150 different occupations. The total hours worked by these individuals are the equivalent of 11.53 full-time, direct jobs over the course of a year.

The study notes that nearly all of these jobs are required only while wells are being drilled.

By comparison, 0.17 long-term, full-time jobs associated with the production phase of development are created for each well drilled in a given field. While comprising a very small percentage of the overall workforce, these long-term jobs compound every year as more wells are drilled. For example, if 100 wells were drilled each year for 10 years, 17 production jobs would be created each year, according to the study.

The study found the majority of occupations in the direct workforce were unskilled or semi-skilled jobs including heavy equipment operation, CDL truck operation, general labor, pipefitters and a variety of office-related occupations. These occupations account for about 75 percent of the workforce.

Learn on the job

Industry representatives, survey respondents and additional research indicated that most of these occupations require no formal post-secondary education, and only a few, such as CDL, welding and X-ray, require a specialized license or trade certification.

However, nearly all of them require the skills and knowledge unique to the natural gas industry, which are best learned through experience. Workers within all occupations of the natural gas industry are additionally prized for their hard work ethic and willingness to work very long hours in unfavorable conditions, the study found.

The majority of the remaining 25 percent of workers are in occupations that are white collar in nature, including foremen, supervisors, paralegals, Realtors, engineers and geological scientists.

Larry Milliken, director of Energy Programs at Lackawanna College, said that industry wide, jobs in the gas and oil drilling industry pay about 20 percent better than the same types of jobs in other industries.

“Around here, there are an awful lot of jobs in the $9- to $14-per-hour range. Jobs in the oil and gas industry tend to start in the $18-per-hour range and go up from there,” Milliken said.

A petroleum engineer might earn $40,000 to $45,000 teaching at a college or university, but working in the field for a gas or oil company, the engineer could make close to $90,000, he said.

The average technician in the natural gas industry can expect to earn about $30 per hour, which equates to an annual salary of about $60,000. A starting technician with a two-year degree can expect to earn $18 to $20 to start, amounting to a salary near $40,000, Milliken said.

In gas production growth areas, employees with at least associate’s degrees would tend to progress up the employment ladder “faster than someone off the street,” Milliken said.

Sweeney said Chesapeake has a variety of recruiting events, such as a drill-rig worker recruiting event this week through PA CareerLink, and a job fair in Towanda in October that attracted more than 1,000 applicants.

Chesapeake also employs a Scranton-based professional recruiting firm to recruit local employees for NOMAC, Chesapeake’s wholly owned drilling subsidiary.

Company officials plan to build a residential and training facility in Bradford County this year to serve as quarters for out-of-town employees and as NOMAC’s Eastern U.S. Training Facility, which will help the company train workers, Sweeney said.

Coming tomorrow: Schools gear up to train Marcellus Shale workers.

Copyright: Times Leader

Supervisor seeking a meeting with Encana Energy Corp. so questions can be fielded.

EILEEN GODIN Times Leader Correspondent

LAKE TWP. – On Wednesday night, supervisors and residents discussed concerns about gas drilling likely to begin in May or June.

A property off Zosh Road, near the border with Lehman Township, will be a future site of a Marcellus Shale gas drilling operation. Supervisors were unsure of the exact acreage of the property.

Supervisor Amy Salansky said the drilling company is Encana Energy Corp., headquartered in Calgary, Canada, working in partnership with WhitMar Exploration Co.

Knowing residents will have many concerns, Salansky said she is trying to arrange a meeting with Encana Energy Corp. so questions can be addressed.

Concerned about gas trucks blocking roads, resident Charles Kohl questioned supervisors on which routes the trucks will be using. Salansky said an official route has not been submitted by Encana. She added the trucks will not be blocking roads.

“During a recent zoning board meeting, possible routes were discussed but nothing was decided,” she said.

Township solicitor Mark McNealis said it is not up to the supervisors to decide which public roads the gas company can and cannot use.

Chairman Lonnie Piatt said supervisors are looking into bonding roads for weight limits. By bonding roads and posting weight limits, the township is protecting roads from damage caused by heavy trucks.

The procedure to bond a road requires an engineer to study the materials in the road makeup and determine how much weight those materials can sustain.

About three quarters of the township roads are dirt and gravel roads. Zosh Road is one of them. Piatt said that currently the gas company would assume responsibility for repairing and maintaining Zosh Road.

Residents within a mile of the site are being advised to get their well water tested. This would provide them with a starting point baseline to measure if contaminants should leak in.

If residents visit Penn State’s Cooperative Extension’s Web site at http://water.cas.psu.edu and click on “Drinking Water,” then “Testing & Protection” and then “Find a Local Water Lab,” they will find a listing by county of accredited water testing laboratories.

The next supervisors’ meeting is scheduled for 7 p.m. April 14 in the municipal building.

Copyright: Times Leader

Municipality’s planning board has recommended approving a plan to drill a test gas well.

By Rory Sweeneyrsweeney@timesleader.com
Staff Writer

LEHMAN TWP. – After more than a year of rising interest in the Marcellus Shale just outside the county, Lehman Township supervisors will in January set the tone for natural-gas drilling in Luzerne County.

On Monday evening, the township’s planning board recommended approving a plan to drill a test well at a Peaceful Valley Road site. The vote on the conditional use now goes before township supervisors at their Jan. 20 meeting, at which they will also consider local concerns about groundwater contamination and road damage.

“To the planning (board), it appeared that EnCana … answered those questions adequately,” said Raymond Iwanowski, the vice chairman of the board of supervisors, who was at Monday’s meeting. “As supervisors, we’re pretty united on this. We want to do it right.”

The plan was proposed jointly by Calgary, Canada-based EnCana Oil and Gas and Denver-based WhitMar Exploration Co., which are partnering on exploratory drilling in the county.

If indications from three test wells are positive, the companies plan to expand operations. If not, their leases put them under no further obligation.

Along with the Lehman site, they have identified single sites in Fairmount and Lake townships. Neither of those municipalities has planning boards, so consideration and recommendation of those plans transfer to the county’s planning commission, which is expected to address them on Jan. 5.

With environmental damages and health concerns in connection with gas drilling in Dimock Township, Susquehanna County, making news throughout the year, Iwanowski said groundwater protection is a “also an eye-opener than we have to be vigilant so that that doesn’t happen here,” though he noted that those issues involve a different gas company.

“There are other safeguards that EnCana and Chesapeake and other companies use to alleviate those problems,” he said. “I feel much better about the drilling process than I did a year ago. I was born in the coal mine era. What I don’t want is another coal-mine rape of the land and leave.”

EnCana isn’t without its environmental controversies. It’s currently the focus of an investigation into contaminated water supplies near gas drilling in Pavillion, Wyo.

To ease concerns locally, the drillers are going beyond state regulations. They’re performing baseline groundwater testing for properties within a mile of drilling sites and promise to remediate contamination caused by drilling.

Regarding roads, the company is willing to bond any road required by the township and make contributions for maintenance, said EnCana spokesman Doug Hock.

Copyright: Times Leader

EnCana Corp. will work with WhitMar Exploration Co. in seeking gas in the Marcellus Shale in the region.

By Rory Sweeneyrsweeney@timesleader.com
Staff Writer

EnCana Corp., perhaps the largest natural-gas producer in North America, has chosen Luzerne County as its entry point into the Marcellus Shale, thanks to an exploratory agreement with WhitMar Exploration Co.

WhitMar, a Denver-based exploratory company, has already leased about 25,000 acres in Columbia and Luzerne counties, including in Fairmount, Ross, Lake, Dallas, Lehman, Jackson, Huntington, Union, Hunlock and the northwest corner of Plymouth townships.

However, it doesn’t have the resources to develop the entire leasehold, so it went looking for a partner. It found EnCana, a Calgary-based company with U.S. headquarters in Denver that produced 1.4 trillion cubic feet of natural gas in 2008, according to its Web site. For comparison, Chesapeake Energy, another industry leader with a local presence, produced 839.5 billion cubic feet that year, according to its 2008 annual report.

Spokesman Doug Hock said EnCana has no other interest in the Marcellus Shale, a ribbon of gas-laden rock about a mile underground that stretches from upstate New York into Virginia but centers on Pennsylvania.

The agreement, however, only commits EnCana to the two exploratory wells WhitMar has agreed in its leases to create, Hock said. “Further activity will really depend on the results of the first two wells,” he said. “The first couple wells that we’re drilling are really to prove it up and ensure that we have viable program there.”

Both wells, while exploratory, will also be put into production, he said, though it’s unclear where pipelines will be installed to connect the wells to regional gas lines.

The deal gives EnCana 75 percent interest in the leasehold and control as the operator, according to WhitMar spokesman Brad Shepard. “Being an exploration company, we’re a small company,” he said. “At least in the Marcellus, we get a partner to develop it with.”

He said there were several companies interested, but that EnCana was “the best fit” thanks to similar interests in testing, drilling and size of the project.

Both companies are also interested in increasing the acreage in the leasehold, he said. Within the area the current lease encompasses, there are perhaps 25,000 to 30,000 acres that aren’t leased, Shepard said. “What we’re trying to do now is basically trying to infill all the land that we have now,” he said.

According to Hock, EnCana, whose business is currently 80 percent gas production, is in the process of splitting the company into two “pure plays” to “enhance the value” of each: EnCana, which would focus entirely on gas, and Cenovus Energy Inc. to oversee its oil-sands operations in Canada.

“We’re in that process right now,” Hock said. “The deal is expected to close at the end of the month.”

EnCana slid on the New York Stock Exchange this week, from $59.40 per share on Monday to $56.11 on Friday.

Both companies are also interested in increasing the acreage in the leasehold.

Copyright: Times Leader

Court will hear landowners’ claims that gas companies took advantage of them.

MARC LEVY Associated Press Writer

HARRISBURG — Pennsylvania landowners who want to snatch a better deal from natural gas companies hoping to drill into their ground and the potentially lucrative Marcellus Shale formation beneath it will get the ear of the state’s highest court.

Wednesday’s oral arguments in front of the state Supreme Court are certain to be watched closely for its impact on one of Pennsylvania’s biggest economic opportunities and environmental challenges in decades.

For exploration companies with offices from Calgary to Canonsburg, the decision could either bring a huge sigh of relief or the havoc of renegotiating land leases across the state, possibly throwing the entire gas industry into chaos.

The fact that the court moved quickly to hear the case — and resolve a burgeoning number of complaints in state and federal courts — demonstrates the seriousness of the matter.

“By its actions, I think the court recognizes that this really is an extraordinary issue for Pennsylvania and it’s critically important that it is resolved,” said David Fine, a Harrisburg-based lawyer representing ElexCo Land Services Inc. and Southwestern Energy Production Co.

To some extent, justices will hear plaintiffs’ attorneys tell a story of big corporations taking advantage of unsuspecting landowners, paying them a fraction of the upfront per-acre leasing fee that they later paid to other landowners as competition in the land rush intensified.

“They didn’t know Marcellus Shale from a hole in the wall and they feel the gas companies came in and got them to sell away the rights to their property,” said attorney Laurence M. Kelly, who is representing Susquehanna County landowner Herbert Kilmer and his family.

The real legal question will be whether some tens of thousands of leases were never valid because they violate a state law that guarantees landowners a minimum one-eighth royalty from the production of oil and gas on their land.

The lawsuits are just the latest sign that Pennsylvania’s laws governing mineral rights and environmental protection are lagging behind the large, modern-day industry presence that has descended here.

Dozens of exploration companies and contractors have flocked here since early 2008 from as far away as Houston, Denver, and Calgary, Alberta, in a rush to lock up land rights over the thickest portions of the shale. That rush has eased somewhat since the recession drove down natural gas prices — but the legal disputes have not.

By Fine’s estimate, more than 70 lawsuits have been filed in federal and state courts by plaintiffs seeking a judgment that the leases they signed were never valid.

In general, the leases in question give the exploration company the right to subtract certain costs — such as taxes, assessments or transportation — before paying the 12.5 percent royalty. That violates the law, plaintiffs say.

The law, however, is silent on the meaning of “royalty” and whether it is determined before or after those expenses.

Fine and industry officials say it is standard language in leases to deduct those costs — a contention disputed by landowner advocates in Pennsylvania and elsewhere.

But judicial decisions in two of the cases raised the prospect of a myriad of different legal opinions.

In Susquehanna County, the judge in the Kilmer vs. ElexCo case handed the companies an initial victory, saying the law does not specifically prohibit the subtraction of costs. Kilmer has appealed to state Superior Court.

Separately, a federal judge in Scranton hearing a case against Cabot Oil & Gas Corp. denied a motion to dismiss the case, saying the law’s silence does not necessarily mean the costs can be legally deducted.

Fine decided to ask the state Supreme Court to take up Kilmer vs. Elexco immediately, and effectively settle the matter for everyone.

Still, the high court’s decision could create a new kind of chaos. Records of oil and gas leases dating back to the royalty law of 1979 are kept in county courthouses, often in arcane filing systems, making it nearly impossible to know how many landowners and leases are potentially affected.

“I’m sure that no one person knows,” Kelly said.

Copyright: Times Leader