Posts Tagged ‘Tulsa’

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

N.J. gas firm eyes $300M income

ANDREW MAYKUTH The Philadelphia Inquirer

A southern New Jersey gas firm that bought a $2 million Marcellus Shale interest in 2008 says it might generate $300 million in income over its lifetime.

South Jersey Industries Inc., the Folsom, N.J., company that owns South Jersey Gas and several nonutility energy businesses, disclosed to analysts that its purchase of mineral rights in northern Pennsylvania could pay off handsomely.

Chief executive officer Edward J. Graham, speaking to analysts about the company’s annual earnings, said two horizontal wells in which South Jersey Industries has a stake will begin producing income this quarter.

He said the gas operator, St. Mary Land & Exploration Co., of Tulsa, Okla., was still tying the wells to a pipeline, but feels “really good about the prospects.”

Two more wells are planned for this year on the 21,000-acre property in McKean County.

In early 2008, South Jersey Industries paid $2 million for an interest in a partnership that owns the deep-gas rights on the property, Stephen Clark, the company’s treasurer, said in an interview. Since then, the value of mineral rights has skyrocketed.

South Jersey Industries estimates that its combined royalties and ownership rights will net 10.25 percent of the value of the gas produced — the company’s share would be about $300 million, based on an average price of $6 per thousand cubic feet.

“It has the opportunity to be very productive for us,” Clark said.

Graham told analysts that it was premature to estimate earnings, which depend upon the number of wells drilled and the price of natural gas. Production could take years, or even decades, to realize.

The estimates illustrate the huge potential in the Marcellus Shale, which lies under much of Pennsylvania and several surrounding states.

Copyright: Times Leader