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Superior Appalachian Pipeline Company is building a seven-mile natural gas line in Snow Shoe Twp.PA The line is mid-stream pipeline between wells and the sales point.
The pipeline will likely be connected to Texas Eastern Transmission's pipeline. It is scheduled to be completed by mid September or October depending on rain
Another Marcellus Shale drilling policy, which includes a 5 percent severance tax, is being proposed by a Philadelphia lawmaker.
State Sen. Mike Stack (D-Philadelphia) announced last week that his legislation would impose an extraction tax which would overlap the existing impact fee, a policy that mirrors West Virginia law. The Corbett administration and Republican-controlled Legislature have resisted a severance tax.
Citing a report by Reuters, Stack said Pennsylvania stands to lose more than $20 billion over the next 20 years if a severance tax is not adopted.
Utica and Marcellus shale: Southeastern Ohio is drilling hot spot
Y/W if that third q report hits soon and the results are what I think they could be this could see the mid teens pretty quickly. IMO!
NFEI nice pick, thanks for earlier alert!!!
Hi, I just posted what I consider an extremely undervalued nat gas play. I am not sure it fits the definition of what you are looking for but you can take a look it you like. Happy hunting!
Nfei recently filed two quarterly reports. For the first quarter of the year,
they reported revs of 1.12 mil and net profit of 528K. For the second q they reported
revs of over 1.3 mil and a loss of about 113K. Looking at the second q results they
had an unusually large amount of expenses for Depreciation, depletion, amortization
and asset retirement obligation accretion. For the six months these expenses were
over 1 million with about 3/4 of them coming in the second q. Looking at past results
these expenses would appear to be unusually large. If not for these unusual
expenses net profit would have been close to .02 eps for the 6 month period.
NFEI also boasts a book value of over .15 per share. I am alerting it here friday
to give everyone a chance to do plenty of dd and this particular stock needs
plenty because a lot has happened. First of all I noticed a 500 to 1 R/S or so
I thought. Upon further review they did a 500 to 1 R/S immediately followed
by a 1 to 500 F/S. They did this so they could buyout shareholders with small lots
at .22 per share and reduce the number of shareholders to below 300 so they could
delist and avoid the sarbanes oxley expenses like so many others did at around the
same time. It is fully explained here.
http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=8113475
The next issue is they have gotten rid of their CEO and another board member and
former ceo.
http://www.otcmarkets.com/otciq/ajax/showNewsReleaseDocumentById.pdf?id=129955395
http://www.otcmarkets.com/otciq/ajax/showNewsReleaseDocumentById.pdf?id=9797510
This is potentially worrisome because one of these former officer owns a huge amount of
shares and when an officer leaves there is always the possibility that those
shares are going to hit the open market.
I personally was aleviated of these fears at least at this extremely low level
due to finding what the officer paid for the shares.
http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=7836050
As you can see he paid .12 for some of them.
and He paid .10 for a huge chunk.
In November 2009, and February 2010, the Company sold 6,500,000 and 8,000,000 shares,
respectively of its Common Stock at a price of $0.10 per share to Iris Energy Holdings Limited,
an affiliate of the Company whose sole director is Michel Escher, a director of the Company.
In connection with these sales of common stock to Iris Energy at $0.10 per share, the Company
recorded share-based compensation expense of $1.9 million in general and administrative expense,
representing the difference between the market price of the stock on the date of the sale and the
sales price of $0.10 per share of common stock.
I can't imagine he would pay .10 and .12 for shares and then sell anywhere down here.
Just to summarize the book value is .154, they are on pace to make about .01 eps for the year
but if not for the unusually large Depreciation etc. expenses the net profit would be much
higher. It certainly looks like a hugely undervalued stock to me.
Good Morning. I don't know if anyone is still around here but on the off chance... I am looking for infrastructure gas plays. An emphasis on exporters would be preferable. I already pop in and out of UGAZ and have some LNG but I see a bright future here and am looking for diamonds in the rough. Any ideas?
Thanks for your consideration.
Enjoy your time on the road,
have you looked into directly investing into some of that activity?
I've looked a little bit into some Ky. operations.
Jordan Cove Energy Project
The Jordan Cove Energy Project will meet the growing global demand for liquefied natural gas (LNG) by providing direct access to abundant Canadian and U.S. Rockies natural gas supply sources, primarily through existing pipeline and gas gathering networks. Jordan Cove is ideally located on the west coast of the United States, within the international Port of Coos Bay, Oregon. The Jordan Cove LNG terminal will have a Phase I liquefaction design capacity of 6 million tons per annum (mtpa), or approximately 1 billion cubic feet (Bcf) per day.
Jordan Cove’s broad access to diverse gas supplies and advanced regulatory state provides our project with a distinct competitive advantage. The Port of Coos Bay offers a low cost shipping benefit for exporting LNG from North America to energy consuming markets throughout Asia Pacific, South America, Hawaii and Alaska.
We are developing the Pacific Connector Gas Pipeline, a proposed 234 mile, 36-inch diameter pipeline, designed to fully serve Jordan Cove’s gas supply requirements, as well as new gas supply requirements in Oregon.
Jordan Cove is owned by Veresen and the Pacific Connector Gas Pipeline is equally owned by Veresen and a subsidiary of The Williams Companies, Inc.
Nice board O2,
any idea how Veresen is progressing in Oregon?
Just ran across them this a:m, I'll post anything I find here.
interesting, if lng is $17 it is reasonable buy.
re;
Five US Natural Gas Companies for an Export Boom
A US Energy Department study released Dec. 5 has intensified the debate on what America should do with its abundance of natural gas – which could lead to huge opportunities for natural gas companies.
You see, critics of exporting natural gas have argued that exporting the resource to global markets would hurt the US economy by raising natural gas and oil prices.
But the NERA Economic Consulting study, done at the DOE's request, showed the United States would get a positive economic boost from exporting liquefied natural gas (LNG), even under all possible scenarios in which exports are envisioned.
"Across all these scenarios, the US was projected to gain net economic benefits from allowing LNG exports. Moreover, for every one of the market scenarios examined, net economic benefits increased as the level of LNG exports increased," the study found. "In particular, scenarios with unlimited exports always had higher net economic benefits than corresponding cases with limited exports."
The study could increase the chances of the Energy Department approving permits for natural gas companies to build LNG export facilities. Only one company has ever been approved to build an LNG export terminal, and at least 15 more LNG export projects are waiting for the green light.
Here's why companies are vying for a piece of the LNG export market.
Natural Gas Companies to Watch
Some US natural gas companies are ahead of competitors in setting up LNG-export facilities.
Investors who want to profit from LNG exports should keep an eye on these:
Cheniere Energy Inc. (NYSE: LNG) is a Houston, TX-based company with the only currently approved LNG export terminal. The Department of Energy in January approved Cheniere Energy's Sabine Pass Liquefaction terminal in Cameron Parish, LA, which could ship up to 2 billion cubic feet of gas per day by 2015. The company also has plans to open a new export terminal in Corpus Christi, TX that could be operational by 2017.
LNG's stock is up over 103% this year and still has room to grow, as analysts' average target price is more than 20% above its recent price of $17.10.
Dominion Resources Inc. (NYSE: D), a Richmond, VA-based energy producer and transporter, is up 9% this year and provides a solid dividend yield of 4.1%. Dominion hopes to gain approval for its export terminal located in Cove Point, MD and join Cheniere as a leading exporter of LNG.
Analysts are starting to catch on, as last week Credit Suisse reiterated its "Outperform" rating on Dominion and recently both ISI Group and Argus updated their ratings from a "Hold" to a "Buy."
Chevron Corp. (NYSE: CVX), based in San Ramon, CA, should continue to become a leading supplier of LNG exports around the globe with its Wheatstone and Gorgon projects in Australia. Wheatstone's initial capacity is 8.9 million metric tons of LNG per year with maximum daily production of 1.4 billion feet of cubic natural gas. The Gorgon Project is Australia's largest single-resource project, with a 15 million-metric ton per-year LNG facility. Chevron has also funded Cheniere in the development of Sabine Pass and is working to expand its natural gas production in the US On top of all that, CVX stock offers a 3.3% dividend yield.
Veresen Inc. (TSE: VSN), headquartered in Calgary, Veresen is the owner and developer of the Jordan Cove Point Energy Project located in Coos Bay, OR. If approved, Jordan Cove will allow Veresen to operate amid almost no competition on the West Coast. Besides an export terminal in Alaska all other terminals in the US are in the east. VSN stock offers a solid 8.4% dividend and according to the Relative Strength Index, a widely used tool to assess whether a stock is oversold or overbought, VSN has a RSI reading of 26.15 – any reading under 30 indicates oversold.
KBR Inc. (NYSE: KBR) is an alternative play on the natural gas export boom because it helps makes LNG facilities, instead of being a pure energy company. KBR is a leading LNG production facility developer, having constructed more than 40% of LNG production facilities around the world. As spending on LNG plants increases, KBR will get more business - and profits.
wait for some declines that may come.
re;
Detailed Quote for Cheniere Energy Inc. (LNG)
$ 29.47 -0.45 (-1.50%) Volume: 3.06 m 4:01 PM EDT May 24, 2013
After Hours: $ 29.42 -0.05 (-0.17%) Volume: 5.41 k 7:37 PM EDT May 24, 2013
Marcellus Turns Pennsylvania Into 'Saudi Arabia' of Natgas
Men work on a natural gas valve at a hydraulic fracturing site in South Montrose, Pa.
Pennsylvania – currently famous for Philadelphia cheese steaks, Hershey's chocolate and ketchup – is in the midst of a transformation that may yet put the state on the map for another American staple: natural gas.
The Marcellus Shale, a 600-mile formation brimming with natgas, is wedging itself into the conversation of the U.S. energy boom, to the Keystone State's benefit.
Last week, energy giant Chevron announced a plan to purchase 61 acres of land around Pittsburgh – one of several Western Pennsylvania communities targeted for Marcellus development – which the company may use as a new regional headquarters. That purchase came on the heels of Chevron's 2011 $3.8 billion purchase of Atlas Energy and its 622,000 acres in the Marcellus Shale.
Although the Marcellus cuts across six adjacent states that include Ohio, Virginia, and New York, it is the Keystone State that's harnessing the formation to reap a windfall in jobs and investment.
In a recent study, Deloitte and Touche said Marcellus "is projected to dominate the Mid-Atlantic natural gas market." The consulting firm added that other regions like the Gulf Coast and the suddenly hot Bakken region in North Dakota "may face stiff competition" as Marcellus is poised to churn out more than 7 billion cubic feet of shale gas per day.
(Read more: Bakken Emerges as Contender for US Oil Drilling Crown)
"We literally have the Saudi Arabia of natural gas under our feet," said Michael Krancer, a lawyer who heads Blank Rome's energy practice and who is also a former Pennsylvania secretary of environmental protection.
The state's production numbers surged by 69 percent in 2012 versus the prior year, and gas exploration jobs that have risen over 80 percent over the same time frame, Krancer said, calling Marcellus' potential "prodigious.The production numbers are off the charts."
Environmental concerns have led to moratoriums on drilling in other Marcellus states, or less aggressive moves to tap the shale bounty.Yet observers say Pennsylvania's lengthy experience with resource development makes it fertile ground for production.
The state "has a history of natural resource development:coal mining in particular," said Susan Christopherson, professor of urban planning at Cornell University and the author of a study examining the unfolding regulatory and legislative framework of Marcellus production. "A place that has experience with this, like Texas, is more likely to support it."
Marcellus is frequently mentioned as a linchpin of a revamped U.S. energy policy, one that provides more jobs and buttresses security. Yet Christopherson cast doubt on how much benefit communities can get from the Marcellus boom.
"Some of these municipalities are going to get tax revenue…but this isn't like manufacturing where you put in a plant and people go to work," she said. "The economic impacts of these kinds of things are uneven, and there's a boom-bust cycle to them."
She added that while many workers associated with Marcellus projects may work in the region, they may channel money to other areas where they either maintain residences, or spend their leisure time.
That includes states like New York and New Jersey, which aren't involved in shale gas production right now. "When you look at jobs development, you don't look at where the activity is. You look at where people are spending money," Christopherson said.
However, that hasn't stopped companies from making major investments, or touting the economic benefits of Marcellus exploration. Two years ago, Royal Dutch Shell plunked down $4.7 billion on a company active in the region, and is building an ethane production hub using Marcellus shale. At the time, Shell's president Marvin Odum said the company's activities would "create more American jobs."
Blank Rome's Krancer said that Marcellus "is at the sunrise of this [energy] renaissance. This is going to be just the beginning of an economic juggernaut for the US and Pennsylvania."
Five US Natural Gas Companies for an Export Boom
A US Energy Department study released Dec. 5 has intensified the debate on what America should do with its abundance of natural gas – which could lead to huge opportunities for natural gas companies.
You see, critics of exporting natural gas have argued that exporting the resource to global markets would hurt the US economy by raising natural gas and oil prices.
But the NERA Economic Consulting study, done at the DOE's request, showed the United States would get a positive economic boost from exporting liquefied natural gas (LNG), even under all possible scenarios in which exports are envisioned.
"Across all these scenarios, the US was projected to gain net economic benefits from allowing LNG exports. Moreover, for every one of the market scenarios examined, net economic benefits increased as the level of LNG exports increased," the study found. "In particular, scenarios with unlimited exports always had higher net economic benefits than corresponding cases with limited exports."
The study could increase the chances of the Energy Department approving permits for natural gas companies to build LNG export facilities. Only one company has ever been approved to build an LNG export terminal, and at least 15 more LNG export projects are waiting for the green light.
Here's why companies are vying for a piece of the LNG export market.
Natural Gas Companies to Watch
Some US natural gas companies are ahead of competitors in setting up LNG-export facilities.
Investors who want to profit from LNG exports should keep an eye on these:
Cheniere Energy Inc. (NYSE: LNG) is a Houston, TX-based company with the only currently approved LNG export terminal. The Department of Energy in January approved Cheniere Energy's Sabine Pass Liquefaction terminal in Cameron Parish, LA, which could ship up to 2 billion cubic feet of gas per day by 2015. The company also has plans to open a new export terminal in Corpus Christi, TX that could be operational by 2017.
LNG's stock is up over 103% this year and still has room to grow, as analysts' average target price is more than 20% above its recent price of $17.10.
Dominion Resources Inc. (NYSE: D), a Richmond, VA-based energy producer and transporter, is up 9% this year and provides a solid dividend yield of 4.1%. Dominion hopes to gain approval for its export terminal located in Cove Point, MD and join Cheniere as a leading exporter of LNG.
Analysts are starting to catch on, as last week Credit Suisse reiterated its "Outperform" rating on Dominion and recently both ISI Group and Argus updated their ratings from a "Hold" to a "Buy."
Chevron Corp. (NYSE: CVX), based in San Ramon, CA, should continue to become a leading supplier of LNG exports around the globe with its Wheatstone and Gorgon projects in Australia. Wheatstone's initial capacity is 8.9 million metric tons of LNG per year with maximum daily production of 1.4 billion feet of cubic natural gas. The Gorgon Project is Australia's largest single-resource project, with a 15 million-metric ton per-year LNG facility. Chevron has also funded Cheniere in the development of Sabine Pass and is working to expand its natural gas production in the US On top of all that, CVX stock offers a 3.3% dividend yield.
Veresen Inc. (TSE: VSN), headquartered in Calgary, Veresen is the owner and developer of the Jordan Cove Point Energy Project located in Coos Bay, OR. If approved, Jordan Cove will allow Veresen to operate amid almost no competition on the West Coast. Besides an export terminal in Alaska all other terminals in the US are in the east. VSN stock offers a solid 8.4% dividend and according to the Relative Strength Index, a widely used tool to assess whether a stock is oversold or overbought, VSN has a RSI reading of 26.15 – any reading under 30 indicates oversold.
KBR Inc. (NYSE: KBR) is an alternative play on the natural gas export boom because it helps makes LNG facilities, instead of being a pure energy company. KBR is a leading LNG production facility developer, having constructed more than 40% of LNG production facilities around the world. As spending on LNG plants increases, KBR will get more business - and profits.
Oilman pushes natural gas plan ~ Taxes oilman & billionaire T. Boone Pickens said he's spennt $80 Billion of his own money to shift the U.S. Dependence on oil toward natural gas, which is abundant in the U. S. A bill was introduced Wednesday in the House ~ which would give natural gas prouucers, engine makers and truck operators tax incentives > Hopes to have it pasted this yr
do you have any low pps ones in this area?
re;
Engelder, working with Gary Lash, professor of geoscience, SUNY Fredonia, has conservatively estimated that the Marcellus shale contains 168 trillion cubic feet of natural gas in place and optimistically suggests that the amounts could be as high as 516 trillion cubic feet.
answer;
is this a company?
Engelder, working with Gary Lash, professor of geoscience, SUNY Fredonia, has conservatively estimated that the Marcellus shale contains 168 trillion cubic feet of natural gas in place and optimistically suggests that the amounts could be as high as 516 trillion cubic feet.
symbol SUNY?
yes like this shale stuff in pa. one we do is there.
Range Resources ~ Anadarko ~ Both are operating in Central Pa > Marcellus Shale ~
what company symbol am i looking fer?
A PROMISING START: Marcellus Shale exploratory phase
Gas abundant in test wells; firms begin investing in infrastructure to pipe commodity eastward
Cliff White- cwhite@centredaily.com
September 20, 2010 8:20am EDT
Promising results from exploratory gas wells in Centre County have focused the interest of some energy companies on the area, making it likely the county will see increased drilling in coming years.
CDT/Nabil K. Mark
A natural gas well being drilled along State Line Road north of Snow Shoe, Pa. CDT/Nabil K. Mark May 22, 2008
View larger
Will gas tax mean more money for Pennsylvania? Researchers say no
Anadarko Petroleum Corp. spokesman Matt Carmichael said his company recently drilled a well in the eastern end of Snow Shoe Township that has a peak 24-hour test rate of 7.8 million cubic feet of gas per day — well above the break-even profitability rates on horizontal wells in the Marcellus, estimated at 2 to 3 million cubic feet of gas per day. The find was significant enough to be mentioned in the company’s second quarter report to stockholders.
“It shows a level of prospectivity,” Carmichael said. “We may have found a prospective area in that part of Centre County.”
Anadarko has now drilled 21 wells in the county, the most of any company, said Sue Hannegan, assistant director of the county’s Planning and Community Development Office.
A total of 41 wells have been drilled to date in Centre County, all of them in the northern and eastern townships of Rush, Snow Shoe, Burnside and Curtin. Exco Resources has drilled 18 wells, while Range Resources and Carrizo Oil and Gas have each drilled one well. Two other companies, Williams and Enerplus, have purchased leaseholdings in the county but have not yet drilled any wells.
Hannegan said her office has seen increasing interest from gas companies, and based on that and what she has heard from those companies about the quality of the wells drilled so far, she predicated “a lot” more drilling in the future.
“It’s a trend, when you think we had nine wells in January and we have 41 now,” she said. “I would say we’re going to see an increase.”
In its second quarter shareholder report, Exco Resources Chief Operating Officer Harold L. Hickey said the company would focus the bulk of its Marcellus activity in the near future on its 20,000 acres of lease-holdings that straddle Centre and Clearfield counties. He said recent drilling results in that area had been positive.
“We are excited about those results, and we are going to continue to solidify our land position (t)here,” he said. “The big focus is going to be right in” central Pennsylvania.”
Since Hickey’s announcement Aug. 4, Exco has completed three additional wells in Centre County, with eight more planned, according to the Planning Office and the shareholder report.
Still exploring
While initial results have been positive, both Carmichael and Range Resources spokesman Matt Pitzarella cautioned not to interpret them as sure-fire indicators of future development.
“Centre County is in earlier phases,” Pitzarella said. “The process is very statistical in nature. We need to drill enough wells in a certain radius, and then we start combining that with data of the thickness of the shale, its thermal maturity, and compile that to get a really good picture of what the area will produce.”
Carmichael said even when the whole process — he called it “bracketing” — is completed, it still isn’t always a perfect prognosticator.
“One thing that’s clear is there’s not any level of consistency in the prospectivity of the Marcellus from one location to the other,” he said.
For Centre County or any other area of the Marcellus Shale to be considered a viable play, a number of variables other than the richness of the gas have to be considered, Pitzarella said.
“The gas is there, but for the economics of it to work, infrastructure like pipeline capacity has to be in place,” he said. “Without the pipeline, it would be like if you manufactured widgets and you didn’t have the trucks to take them to market.”
Centre County isn’t entirely devoid of pipeline infrastructure, or what gas companies call “midstream.” So far, much of the drilling activity in the county is occurring in relatively close proximity to large transmission pipelines. To expand its ability to drill in locations farther away from existing pipelines, Anadarko announced it will build a gas line that would run about 30 miles through Centre and Clinton counties.
In addition, Superior Appalachian Pipeline LLC plans to construct a natural gas pipeline about 14.5 miles long through Snow Shoe and Burn-side townships, and Exco CEO Doug Miller said the company would spend up to $100 million a year on developing “takeaway” infrastructure in Centre County and elsewhere.
The main question on many local landowners’ minds is what price they can get for leasing their land.
Miller reported to stockholders in Exco’s second quarter report that his company is aiming to lease up to 30,000 more acres in the area. So far, the company has paid in the range from $1,000 to $6,000 an acre, with most leases at five-to seven-year terms at about $5,000 an acre. Royalty rates have increased recently from 8 percent — the state’s mandated minimum — up to as much as 20 percent.
Gas prices a factor
Another major factor in the profitability of the play in Centre County is the price of gas. Because of Pennsylvania’s proximity to the major markets of the East Coast, the Marcellus Shale formation can be profitable for companies at $4 per Mcf (1,000 cubic feet). The price jumped as high as $6 per Mcf last Christmas, but it has hovered at around $4 per Mcf since May.
Each company’s break-even price point for gas depends on its methods of drilling and the expenses it absorbs for items such as leasing land, buying or renting and operating drilling rigs, paying employees and hiring subcontractors.
Even with the average completed well costs coming in around $4 million, Anadarko CEO James Hackett said his company could be profitable in Marcellus with gas prices as low as $3 per Mcf. However, at even slightly higher rates, Hackett said Marcellus has great potential to generate significant returns.
“I believe that this is one of the highest, if not the highest rate of return gas play in the United States,” he said.
Exco’s Miller also expressed confidence his company could be profitable in the Marcellus even if gas prices remain low.
“Gas price doesn’t have to go back to $7 next week. If gas stays at $4 or below for the next six months to 12 months, I think there is going to be a lot of opportunity,” Miller said in his company’s second quarter report.
Mike Arthur, a geosciences professor and co-director of Penn State’s Marcellus Center for Outreach and Research, said rates lower than $3.50 would cause many companies to rethink their strategy in the Marcellus region.
“It would become a question of taking a longer time to see returns, which could make a lot of difference in them deciding whether the investment is worth it,” Arthur said.
The fact that companies are continuing their push into Marcellus even with gas prices remaining low means companies have been happy with their initial drilling results, Arthur postulated.
“It all looks good so far,” he said.
DEP report: Nothing certain
A law passed in March required companies drilling Marcellus Shale wells in Pennsylvania to hand over all production data for the previous year to the DEP in August. The data was released to the public Sept. 8. Though not all companies handed in their results — putting themselves at risk of punishment — the collected findings reveal the potential volume of recoverable gas in Pennsylvania’s Marcellus Shale formation to be greater than industry executives had hoped.
“The data reported a much better performance than expected,” Arthur said. “The wells are more than meeting the expectations.”
The report listed 632 producing wells for the period from July 1, 2009, to June 30. Collectively, they produced about 180 billion cubic feet of gas, more than double Pennsylvania’s annual rate of gas production before the Marcellus boom.
The report shows why much of the gas industry development has so far focused on north-central and southwestern Pennsylvania.
The most productive well, in Susquehanna County, produced 2.8 billion cubic feet of gas over 270 days. Nineteen of the top 20 most productive wells are in the state’s northern tier, either in Bradford, Tioga or Susquehanna counties. Six of the top 10 wells in the state are owned by Chesapeake Energy, and the other four are operated by Cabot Oil and Gas.
Five Centre County wells are on the DEP list, including Anadarko’s C.O.P. 231A well, which is listed as producing 151.6 million cubic feet of gas over 36 days, ranking it 307th out of the 632 wells included in the report.
“It’s not huge, but it’s good,” Arthur said. “Huge would be the numbers some wells in the Northeast reported.”
When each well’s daily average is taken, Anadarko’s Centre County well is producing slightly less than half the amount of gas as the most productive well in Pennsylvania (4.2 million cubic feet a day versus just over 10 million per day).
The four other Centre County wells are owned by Exco Resources and rank 380th, 522nd, 527th and 594th in the state, with daily production volumes ranging from 24,452 cubic feet of gas to 225,931 cubic feet of gas. All four of Exco’s listed wells have been online for at least a full year.
Kristin Carter, chief of carbon sequestration at the Pennsylvania Geological Survey, said the survey was done mainly to give the government an idea of what revenues would be if a gas severance tax were enacted, and that “no quality control” had been done on the data.
“As a geologist, I don't know if I would trust any of the reported results,” she said.
As for how much money a tax would have generated for state coffers? The 180 billion cubic feet of gas reported recovered last year has about $720 million in value, which means a 5 percent severance tax would have collected an estimated $36 million.
What’s to come
The number of Marcellus Shale drilling permits active in the Centre County Planning Office has oscillated over the past year, but now stands at 30. Permits expire after one year, and it’s a frequent industry practice not to drill on all well sites that receive permits. Earlier this year, the Planning Office had 70 active permits. Hannegan expects the number of permits received by her office to increase drastically over the winter months, as drilling operations slow down with the cold weather and companies put more thought into strategic repositioning.
“At that time we can probably get a better feel for what the future holds,” Hannegan said.
In the meantime, Hannegan said she firmly believes shale gas production and exploration in Centre County will be “a very important industry to the county from an economic development standpoint.”
Arthur, of Penn State’s Marcellus Center, agreed, adding his thoughts on what he said was a drastically overlooked component to drilling in Pennsylvania. Just recently, he said, a few companies have begun testing the viability of other segments of Pennsylvania’s shale rock, which could prove just as lucrative than the Marcellus — or even more so. Arthur mentioned the Utica Shale, which lies below the Marcellus, as having great potential. He said Range Resources had tested the Utica with great success.
Marcellus or Utica, Arthur said he was certain more gas drilling is in Centre County’s future. “It's coming,” he said.
Cliff White can be reached at 235-3928.
Read more: http://www.centredaily.com/2010/09/19/2217898/a-promising-start.html#ixzz1BrjdgdVu
Chesapeake won't drill in NYC watershed
By MARY ESCH, Associated Press Writer Mary Esch, Associated
Press Writer – 1 hr 42 mins ago
http://news.yahoo.com/s/ap/20091028/ap_on_bi_ge/us_gas_drilling_ny
ALBANY, N.Y. – Chesapeake Energy, one of the nation's largest natural gas producers, said Wednesday it won't drill in the New York City watershed in upstate New York because of opposition from politicians and environmental groups.
The announcement came hours before the first of four public hearings on the state Department of Environmental Conservation's new gas-drilling regulations, which critics call insufficient to protect the city's water supply.
"We have made the business decision not to drill in the New York City watershed," Chesapeake spokeswoman Maribeth Anderson said.
Concern over drilling in the Catskills region that provides water to the city's eight million residents has become a "needless distraction from the larger issues" of gas development in the state, she said.
Anderson said Oklahoma City-based Chesapeake is the only leaseholder in the 1 million-acre region, which includes a corner of the gas-rich Marcellus Shale formation. It's an area of forests, lakes and streams.
Earthjustice, an environmental group, welcomed the news from Chesapeake but said the decision needs to be backed up by a state ban on drilling in the watershed to ensure permanent protection.
The new rules, released Sept. 30 for a 60-day comment period, were drafted as a supplement to existing state regulations on oil and gas exploration in response to concerns about gas extraction from deep shale formations using horizontal drilling and hydraulic fracturing. In that process, millions of gallons of water combined with chemicals are injected after a well is drilled, fracturing the shale to release the gas.
Hydraulic fracturing, or "fracking," is widely used in the Marcellus Shale formation, a layer of rock about 6,000 feet below ground that extends from southern New York, across Pennsylvania, into eastern Ohio and West Virginia.
Environmentalists and residents worry about accidents that could result in contamination of water supplies by chemicals added to the fracking water or brought up from the shale thousands of feet underground.
Although hydraulic fracturing is generally safe, the technique has been blamed for a number of water pollution cases around the country.
New York's 804-page report spelling out the regulations describes the substantial economic benefits of natural gas development in the Marcellus Shale as well as the potential adverse effects. It outlines requirements designed to protect water resources, air quality, wetlands, roads, and community character, among other things.
Permits to drill in the Marcellus region of New York have been held up for about 18 months while the generic impact statement, which will substitute for individual environmental impact statements, was produced.
K&L Gates, a law firm representing Halliburton and other energy companies, calls the proposed regulations "the most stringent requirements on horizontal drilling and high-volume fracturing activities of any state."
The proposed regulations could be modified after the public comment period. A spokesman for New York Mayor Michael Bloomberg said the administration was still evaluating the proposal and formulating a public comment.
Natural gas distributed throughout the Marcellus black shale in northern Appalachia could conservatively boost proven U.S. reserves by trillions of cubic feet if gas production companies employ horizontal drilling techniques, according to a Penn State and State University of New York, Fredonia, team.
"The value of this science could increment the net worth of U.S. energy resources by a trillion dollars, plus or minus billions," says Terry Engelder, professor of geosciences, at Penn State.
The Marcellus shale runs from the southern tier of New York, through the western portion of Pennsylvania into the eastern half of Ohio and through West Virginia. In Pennsylvania, the formation extends from the Appalachian plateau into the western valley and ridge. This area has produced natural gas for years, but the Marcellus shale, a deep layer of rock, is officially identified as holding a relatively small amount of proven or potential reserves. However, many gas production companies are now interested in the Marcellus.
Engelder, working with Gary Lash, professor of geoscience, SUNY Fredonia, has conservatively estimated that the Marcellus shale contains 168 trillion cubic feet of natural gas in place and optimistically suggests that the amounts could be as high as 516 trillion cubic feet.
"Conservatively, we generally only consider 10 percent of gas in place as a potential resource," says Engelder. "The key, of course, is that the Marcellus is more easily produced by horizontal drilling across fractures, and until recently, gas production companies seemed unaware of the presence of the natural fractures necessary for magnifying the success of horizontal drilling in the Marcellus."
The U.S. currently produces roughly 30 trillion cubic feet of gas a year, and these numbers are dropping. According to Engelder, the technology exists to recover 50 trillion cubic feet of gas from the Marcellus, thus keeping the U.S. production up. If this recovery is realized, the Marcellus reservoir would be considered a Super Giant gas field.
Engelder, who has studied this area of the U.S. for most of his career and began looking into fractures under a National Science Foundation grant 25 years ago, has identified and mapped natural fractures in the Marcellus shale. He and Lash will present some of their recent work at the 2008 American Association of Petroleum Geologists Annual Convention and Exhibition this spring.
The researchers look at the patterns of fractures in the shale and determine which are important for gas production. Fractures that correlate with the folding of the ridge and valley system are less common in black shale. However, because of their orientation, the fractures that formed prior to the folding will release gas if the wells cross the fracture zones.
These fractures, referred to as J1 fractures by Engelder and Lash, run as slices from the northeast to the southwest in the Marcellus shale and are fairly close together. While a vertical well may cross one of these fractures and other less productive fractures, a horizontally drilled well aimed to the north northwest will cross a series of very productive J1 fractures.
"It takes $800,000 to drill a vertical well in the Marcellus, but it takes $3 million to drill a horizontal well," says Engelder.
Companies that drill gas wells need to be certain that horizontal drilling will produce the gas they expect and the work by Engelder and Lash suggests that it will.
"We know that the Marcellus shale appears as an outcrop near Batavia, N.Y., east of Buffalo," says Engelder. "And we can see the fractures in the Marcellus in the exposed sections of the ridge and valley areas to the southeast. Because we see them going through the folded areas, we know they were there before the folding. If it happened earlier, then we know they have to be in the intervening basin as well."
The natural fractures in the Marcellus shale are the key to recovering large amounts of gas. As heavily organic sediments were laid down 365 million years ago, the black shale of the Marcellus formed. As the organic material decayed and degraded, methane and other components of natural gas formed and dispersed through the pores in the rock. About 300 million years ago, the pressure of the gas caused fractures to form in the shale. It was not until 280 million years ago that the eastern portion of Pennsylvania was pushed into the folding of the ridge and valley province that makes up that area. Gas that occurs in pockets underground is considered a conventional reservoir; gas that is distributed throughout the rock, like the Marcellus, is called an unconventional reservoir.
The Penn State-Fredonia approach is not restricted to production of the Marcellus shale, but can be applied to any gas-bearing shale with this type of fracture. Because the approach begins with a vertical well and then drills horizontally in the direction that will crosscut the productive fractures, old vertical wells can be reused.
"We can go back to wells that are already drilled and played out, and then drill horizontal from there," says Engelder. "Reusing old wells has both economic and environmental value."
Engelder and Lash are principals in Appalachian Fracture Systems Inc., a consulting firm.
Environmentalists fight natural-gas leasing in Pa. forests
By Joseph Tanfani and Mario F. Cattabiani
Inquirer Staff Writers
A buried treasure of natural gas under Pennsylvania's forests and hills has a lot of people hoping for a big payoff: rural landowners, big energy companies and, now, the state's politicians.
The state's fragile budget deal rests in part on a plan to raise more than $200 million over two years by opening up more state forest land to gas drilling.
Now, environmental groups and some Democratic lawmakers are furiously trying to roll back the agreement, saying it would open up too much public land for drilling far too quickly - squandering resources and potentially harming the environment.
"It's wrong to rape the state forest system to provide for one or two years' worth of revenue to fund the budget," said Rep. David K. Levdansky (D., Allegheny), who is trying to rally Democratic opposition to the gas leases in the House.
Gov. Rendell, acknowledging that the fight was threatening the budget deal, said yesterday that he was sending his top two environmental officials to lobby lawmakers.
He said the new leases would not damage the state forests. The Department of Conservation and Natural Resources will be careful to steer drilling companies to the areas with the biggest gas reserves, he said, producing the most revenue for the least environmental impact.
"Potential leaders will understand it's not exploration," he said at a news briefing. "They will know what's under there."
A giant reserve of natural gas is trapped inside the Marcellus Shale rock formation - a layer of rock 365 million years old stretching underneath 54 of the state's 67 counties. Worth $1 trillion, just 10 percent of it could supply the entire United States for two years, by some estimates.
Pennsylvania has long had natural gas wells, but recent advances in drilling technology have unlocked the potential of the Marcellus Shale reserves and drawn a rush of drilling companies to the state.
The state's politicians are scrapping over how best to grab some of that revenue in a brutally tough budget year.
Last year, the department leased 74,000 acres of state land in Lycoming and Tioga Counties - collecting a surprising $166 million.
Earlier this year, Rendell was pushing for a tax on gas extracted from wells, but then abandoned it in the face of opposition from the industry and Senate Republicans. Rendell said he came to agree with the argument that it would be wrong to impose a tax now, while Pennsylvania's natural gas industry is still young.
The industry spent more than $1 million on lobbying the legislature in just the first half of this year, state records show.
"That's a lot of shrimp cocktails and dinners," Levdansky said. "This is like full employment for the lobbying community."
Yesterday afternoon in the Democratic-controlled House, a committee approved a tax package that would establish an extraction tax on natural gas.
The plan bucks a bipartisan agreement struck two weeks ago by legislative leaders and Rendell. The House is expected to vote on the measure today.
But Senate Majority Leader Dominic Pileggi (R., Delaware) yesterday said that it had no chance of passing the Senate.
Instead of the tax, Rendell proposes to expand leases on state-owned forests.
Budget projections call for $60 million next year and $180 million the year after that.
That's far too aggressive, opponents say. They worry that the state might be forced to compromise its environmental protections to meet the revenue goals.
"They should not be chasing the dollars, they should be doing what they have always done - managing the forests for multiple uses, in the public interest," said Jan Jarrett, president of PennFuture, an environmental advocacy group.
She and other advocates also oppose a plan to move the oil and gas revenues into the general budget. Until now, that money has been set aside for state parks and conservation projects.
Inside the natural resources department, staffers are unhappy with the expanded drilling plans, said one former high-ranking department official.
"If left to their own devices, I seriously doubt they would lease another acre of new land until they see how the existing ones are playing out and what problems they are creating," said Rick Carlson, the former policy director.
Chris Novak, the department's communications director, said the state would not abandon its safeguards to increase revenues. The state does not permit drilling in wilderness areas or other sensitive sites.
"It's a balance," she said.
Stephen Rhoads, the industry's chief lobbyist in Harrisburg, said the idea that the new leases will somehow ruin the forests is "nonsense." The department has been leasing land in state forests since the Depression.
The department has not decided where or how many acres to lease next year, but the best estimates are around 80,000, he said - not a huge amount.
"It isn't as if they are going into this willy-nilly," said Rhoads, president of the Pennsylvania Oil and Gas Association.
When it comes to natural gas operations, state forests are far from virgin territory.
Natural gas leases cover more than half of the 1.5 million acres of state forest land in the Marcellus Shale area. Thus far, the natural resources department has approved 147 well sites; 12 are being drilled and two are completed.
The natural gas is extracted from the shale by a process called fracking. Under high pressure, a mixture of water, sand, and chemicals is pumped deep underground to break apart the rock formation and release the gas.
Last week, the state Department of Environmental Protection charged Cabot Oil & Gas with five violations after nearly 8,000 gallons of the fracking solution spilled in Susquehanna County. Some entered a nearby creek.
Rhoads said the Cabot problems were caused by "some bad housekeeping" on the site, not with any problems in the technology.
"We've been fracking wells in Pennsylvania since the 1940s," he said. "We have a very very fine track record."
HUGHESVILLE, Pa. — At first, Raymond Gregoire did not want to listen to the raspy voice on his answering machine offering him money for rights to drill on his land. They want to ruin my land, he thought. But he called back anyway a week later to hear more.
Kalim A. Bhatti for The New York Times
Property owners at a seminar in Clarks Summit, Pa., on negotiating with gas lease companies.
By the end of February, he had a contract in hand for $62,000, and he pulled together a group of 75 neighbors who signed $3 million in deals.
“It’s a modern-day gold rush in our own backyard,” Mr. Gregoire said.
Not just his backyard either — a frenzy unlike any seen in decades is unfolding here in rural Pennsylvania, and it eventually could encompass a huge chunk of the East, stretching from upstate New York to eastern Ohio and as far south as West Virginia. Companies are risking big money on a bet that this area could produce billions of dollars worth of natural gas.
A layer of rock here called the Marcellus Shale has been known for more than a century to contain gas, but it was generally not seen as economical to extract. Now, improved recovery technology, sharply higher natural gas prices and strong drilling results in a similar shale formation in north Texas are changing the calculus. A result is that a part of the country where energy supplies were long thought to be largely tapped out is suddenly ripe for gas prospecting.
Pennsylvania, where the Marcellus Shale appears to be thickest, is the heart of the action so far. Leasing agents from Texas and Oklahoma are knocking on doors, leaving voice mail messages and playing host at catered buffets to woo dairy farmers and retirees. They are rifling through stacks of dusty deeds in courthouse basements to see who has underground mineral rights to the deepest gas formations.
Thomas B. Murphy, a Pennsylvania State University educator who runs a program to instruct landowners on their rights, estimated that more than 20 oil and gas companies will invest $700 million this year developing the Marcellus Shale. Up to one half of that will be invested in Pennsylvania, he estimated.
The cost to companies for leasing mineral rights jumped from $300 an acre in mid-February to $2,100 now. “It shows you the pace this is going,” Mr. Murphy said. “I would call it breakneck.”
Dale A. Tice, a lawyer representing landowners in lease negotiations, said companies were on a “feeding frenzy.”
Industry experts say in the last three years companies like Anadarko Petroleum, Chesapeake Energy and Cabot Oil and Gas have leased up to two million acres for drilling in the region, half of that in the last nine months.
Whether their bets will pay off is by no means a sure thing.
Researchers at Penn State and the State University of New York at Fredonia estimate that the Marcellus has 50 trillion cubic feet of recoverable natural gas, roughly twice the amount of natural gas consumed in the United States last year. But government estimates of the amount of gas recoverable from the Marcellus are relatively modest.
Early test results have encouraged companies to keep drilling, but most are holding details of their test wells close to the vest.
The company that has done the most work is Range Resources of Fort Worth, which says it plans to invest at least $426 million in the Appalachia region this year.
The company has reported promising results from the first 12 wells that it has drilled horizontally, the technique considered by most experts to be the most effective in the Marcellus. The most recent six have each produced more than three million cubic feet of production a day in recent months, and company executives say that is better than the average for wells recovering natural gas in the Barnett Shale in north Texas.
“The Marcellus is important to Range and it could be important to the country but it really is still early,” said Rodney L. Waller, a senior vice president at Range. “I can build you a scenario where it can be significantly better than the Barnett but it’s a function of economics.”
Energy experts say the Marcellus, along with other smaller shale formations being developed around the country, is coming under scrutiny at an opportune moment, just when conventional domestic natural gas production and imports from Canada are diminishing. With easy-to-find gas fields in decline, the country will need to explore in deeper waters in the Gulf of Mexico and penetrate deeper under the surface on land.
officials say.
Pennsylvania is at the forefront of the nation’s gas drilling boom, with at least 4,000 new oil and gas wells drilled here last year alone, more than in any other state except Texas. This rapid expansion has forced state regulators to confront a problem that has been overlooked as gas drilling accelerates nationwide: How will the industry dispose of the enormous amount of wastewater it produces?
Oil and gas wells disgorge about 9 million gallons of wastewater a day in Pennsylvania, according to industry estimates used by the DEP. By 2011 that figure is expected to rise to at least 19 million gallons, enough to fill almost 29 Olympic-sized swimming pools every day. That’s more than all the state’s waterways, combined, can safely absorb, DEP officials say.
Natural Gas
will increase in price
what is it/ is english your second language man?
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