Posts Tagged ‘Procter & Gamble’

By Elizabeth Skrapits (Staff Writer)
Published: July 5, 2010

Luzerne test wells’ results awaited

Depending on how its first natural gas wells turn out, Luzerne County could attract a lot of attention from potential drillers.

“I suspect everybody’s interest levels will be piqued if Encana gets successful,” said Steve Myers, director of Land and Legal Affairs for Citrus Energy Corp.

Encana Oil & Gas USA Inc. is poised to start drilling two exploratory natural gas wells this summer, one in Fairmount Twp., on the property of Edward Buda off Route 118, and the second in Lake Twp. on the property of Paul and Amy Salansky on Sholtis Road.

Drilling for natural gas in an area once known for anthracite coal mining is a daring move, by industry standards.

“Everyone’s nervous about going that far south,” Mr. Myers said.

Maps of the Marcellus Shale show the formation running throughout Luzerne County. However, its shale may not be very rich in gas due to the proximity of the anthracite coal-producing areas and high temperatures, which can turn the gas into carbon dioxide, Mr. Myers said.

“There’s some concerns that the Marcellus Shale was subjected to some high temperatures, high pressures that would have converted the shale to graphite and cooked off whatever gas was in place,” he said.

There’s a line that exists, but nobody knows exactly where it is, Mr. Myers said.

“One side, it’s going to be productive; you throw a rock and it’s not,” he said. “Kind of like a summer shower. It can rain across the street, but it doesn’t rain in your yard.”

Encana officials are willing to take the risk.

“We’ve said all along that it’s exploratory, and we have to prove we can develop commercial quantities of natural gas,” Encana spokeswoman Wendy Wiedenbeck said.

“We’re not focused on what other operators are doing; we’re just focused on acting responsibly and getting the wells drilled. And the well results will speak for themselves.”

Although the drill rig is expected to arrive in Fairmount Twp. at some point after today, and the drilling and completion process will take an estimated 65 to 75 days total, production results won’t be in until the end of the year or even 2011, Ms. Wiedenbeck said.

Gas production for the Fairmount Twp. and Lake Twp. wells will have to be reviewed before Encana makes further plans, she said.

At one time Citrus had considered drilling in Luzerne County, leasing hundreds of acres in Lake and Fairmount townships in partnership with Tulsa, Okla.-based Unit Corp. But the partnership broke up and Citrus ended up selling off almost all its leases to Williams Production Appalachia.

Williams Inc., also based in Tulsa, does natural gas drilling and processing, and owns thousands of miles of pipelines, including the Transco, which runs through northern Luzerne County – conveniently close to Encana’s planned drilling sites.

Williams has received permits from the state Department of Environmental Protection to drill three wells in Columbia County: two in Benton and one in Sugarloaf Twp.

Another natural gas company, Oklahoma City-based Chesapeake Energy, also has dozens of leases in Luzerne County but hasn’t made a move yet.

“Chesapeake is still evaluating the area. However, as we drill each new well, we learn more about the potential and the productivity of particular geologic areas, and this information guides our decisions about where to focus future activity,” Brian Grove, Chesapeake director of corporate development, stated in an e-mail.

For the time being, Citrus is focusing its efforts in Wyoming County, according to Mr. Myers. The company has drilled four wells so far in a successful partnership with Procter & Gamble, and has more in the works.

Citrus also plans to drill its own wells in Wyoming County, where it has leased large chunks of land – as have Chesapeake, Carrizo Marcellus LLC, Chief Oil & Gas, and others drawn by the prospects of production in Luzerne County’s neighbor to the north.

“It’s very much a hotbed of activity,” Mr. Myers said. “Any time you get good production, people are going to come. … We expect to have plenty of company here in the future.”

Contact the writer: eskrapits@citizensvoice.com

View article here.

Copyright:  The Scranton Times

The company hopes to see more than two dozen wells drilled on its property.

By Rory Sweeneyrsweeney@timesleader.com
Staff Writer

MEHOOPANY — In October, drilling for natural gas will begin at the Procter & Gamble plant in Mehoopany, and, if geologic estimates pan out, the company hopes to eventually see more than two dozen wells drilled on its property, saving it “tens of millions” of dollars annually for years to come.

The Wyoming County plant consumes about 10 billion cubic feet of natural gas a year that is piped up from the Gulf Coast, company spokesman Alex Fried said. The hope is that drilling on its own property will alleviate much of that need.

“If the wells are productive, sure there’s the possibility. We’ve got enough property there,” Fried said. “If they can supply that, I’ll gladly take it because I’d rather get it from under my own ground.”

Located in Wyoming County, the plant sits in a potentially productive section of the Marcellus Shale, the layer of rock about a mile underground stretching from New York to Virginia that has natural gas locked within its pores. Though it was known about for decades, accessing the rock has only recently become financially feasible with advancements in technology.

Colorado-based Citrus Energy Corp. contracted with P&G to construct five well pads at the company’s 1,300-acre property on the bank of the Susquehanna River. The township gave approval for all five sites, as did the state Department of Environmental Protection for the erosion and sedimentation plans.

Additionally, Citrus got a permit in December from the Susquehanna River Basin Commission to withdraw 499,000 gallons of water per day from the river. It has been bonded with the Pennsylvania Department of Transportation to cross state Route 87 and signed a road-maintenance agreement to use Carney Cemetery Road to access the sites.

Citrus still needs drilling permits from DEP for two sites, but Fried said the sites currently aren’t necessary. “The (sites) at the westernmost and easternmost part of our property aren’t going to be built until next year,” he said.

Starting in October, a well will be drilled at each of the middle three pads. Next year, if the geological indications look good, the company will consider drilling the wells deeper by going horizontally through the shale seam.

After that, the focus will shift to the two remaining pads.

If that all works out, Fried said, P&G could lease land at a 300-acre warehousing site about a mile from the plant, where at least one more pad could be built. In all, Fried estimated, perhaps 30 to 35 wells could be drilled.

Fried declined to discuss the royalty deal struck with Citrus, but described it as “very competitive” because the company could offer a variety of advantages, including access to water, industrial zoning and a direct connection between the buyer and seller.

It also boasts rail access, which Fried said could be used in the future to haul away the contaminated fluid that’s used to break open the rocks and release gas.

The drillers “can haul away 35,000 gallons at a time on a tanker car,” Fried said.

Another benefit is that the gas doesn’t have to go far to get used. “The pipeline will bring it right to the plant, so we’ll still get our royalty, except it just will be a discount off the price of the gas that we’re purchasing,” Fried explained.

Fried said interest in inking a deal came from both sides. He began researching the possibilities at the beginning of the year, around the same time unsolicited calls started rolling in from gas companies.

Originally, the companies simply wanted to lease the land and sell the gas, but Fried had another idea – keeping the gas at home.

“In many cases, they just came in and said, ‘We want to lease,’ ” he said. When he told them how much gas P&G would be willing to buy each year, “their jaws dropped and hit the floor,” Fried said.

Copyright: Times Leader