Shale Plays Gone Wild - The Barnett (DVN, XTO, ECA) - Petroleum - It's The End Of The World As We Know It - New World Order - Natural Resources Investing - Message Board

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Shale Plays Gone Wild - The Barnett (DVN, XTO, ECA)

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patgarrett666		#61	[-]
Member Posts: 11000 (08/04/09 19:47:09) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	I saw one paper a few eeeks ago that had varying costs per shale gas field and the range of production costs was as low as $1.20 Mfcu. I can't find it now but the list included the large ones Marcellus, Barnett, Fayetteville and Horn River. I didn't see anything on the period of payback or well stats for well life and recharge. It's always a risky venture with dry holes and marginal production but the people always look for the boomers like some of those choked back 100 Mfcu per day wells. String enough of those together and that's some serious money even if prices stay low as they are now. What I see are the low cost shales under cutting the conventional gas production and eventually replaceing the deep large wells in the GOM and onshore land deep sands. The shales will soon stop being considered nonconventional and become the main conventional gas production in my opinion. Pat
mancovaldez	What We Learned About The Marcellus Shale	#62	[-]
Member Posts: 10154 (08/04/09 23:46:19) Moderator Extraordinaire Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	What We Learned About The Marcellus Shale By Eric Fox Earnings season has reinforced the attraction of several North American shale plays currently being developed by the exploration and production industry. These include the Marcellus Shale, a vast shale formation in the Northeastern United States. Companies are increasing acreage and improving well results as they apply better technology. Although most activity is currently centered in Pennsylvania, the play extends into several states, including New York, West Virginia and Ohio. Horizontal Is Better Cabot Oil and Gas (NYSE:COG) updated its development progress in the Marcellus Shale in conjunction with second-quarter earnings. The company completed a horizontal well and reported an initial production rate of 10.3 Mmcf per day for a recent well. After 30 days the average rate was still high at 9.8 Mmcf per day. Horizontal drilling is critical to these shale plays, and Cabot Oil and Gas proved this with its second completion in the Marcellus Shale. A well drilled vertically had an initial production rate of 4.2 Mmcf per day, not even 50% of the production of the horizontal. Repeatable Plays and Leases Range Resources (NYSE:RRC) also released an operations update. The company is now producing 50 Mmcfe per day of natural gas from its Marcellus acreage as of mid July 2009, and the company is producing from 41 of the 46 wells it has drilled there. During the conference call, the company gushed over the Marcellus. "We believe this is the best rate of return and finding costs of any large scale, repeatable play in the United States," said Jeffrey Ventura, the President of Range Resources. The play is apparently so attractive that some operators are still leasing acreage. CNX Gas (NYSE:CXG), which already had substantial acreage in the Marcellus Shake, just added 40,000 more acres. The company leased half its new acreage from CONSOL Energy (NYSE:CNX), its parent company, and the rest from a private owner. Chesapeake Energy (NYSE:CHK) is the largest leaseholder in the Marcellus Shale, with 1.45 million acres in its portfolio. The company is currently operating with 15 rigs in the play, and will need 28 rigs by 2010 to fulfill its plan to drill 165 wells that year. The Bottom Line This continued push by the exploration and production industry into the Marcellus Shale is interesting considering that the fundamental outlook for natural gas prices is not that good, with high storage levels and depressed demand due to the recession. It seems that the industry is migrating its activity to these shale plays from higher cost areas. The exploration and production industry is still rushing headlong into the Marcellus Shale, and with good reason, as the area is large and the wells are prolific now that the industry has perfected the technology to produce the vast unconventional resources that are abundant in North America. (For more, check out Become An Oil And Gas Futures Detective.)
patgarrett666	Canada's Horn River Basin has natural gas producers envisioning another Barnett Shale	#63	[-]
Member Posts: 11000 (08/10/09 06:30:29) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	Canada's Horn River Basin has natural gas producers envisioning another Barnett Shale By JACK Z. SMITH jzsmith@star-telegram.com The Dallas-Fort Worth area and Canada's remote Horn River Basin are more than 2,300 miles apart, but there's nevertheless a significant new link between the two highly diverse regions. Horn River, in a heavily forested area of northeast British Columbia where subzero temperatures are commonplace, is now drawing comparisons to North Texas' Barnett Shale, a hotbed of drilling activity recently cited as the biggest natural gas-producing field in the United States. There's increasing talk that Horn River, scene of a budding natural gas play attracting major oil industry players, could become another Barnett Shale in terms of headline-making gas production. The two regions have very similar geologies, and both are "unconventional" gas plays requiring advanced horizontal drilling techniques and extensive hydraulic fracturing to make them economically attractive. The key players involved in Horn River also have strong Metroplex connections. Among the companies staking out large Horn River leaseholds are Fort Worth-based Quicksilver Resources, Irving-based behemoth Exxon Mobil Corp. and Oklahoma City-based Devon Energy, which is the No. 1 gas producer in the Barnett Shale and has a 550-employee North Texas work force. Quicksilver's quest Horn River "has the potential to be one of North America's most significant new shale plays," said Rick Buterbaugh, Quicksilver's vice president for investor relations and corporate planning. The 600-employee company, with 450 employees in Fort Worth, has about 127,000 net acres in the Horn River leased from the Canadian government. It has drilled two wells, but hasn't completed them. The completion process includes hydraulic fracturing, the high-pressure blasting of the underground rock layer with water and sand to allow gas to flow into a wellbore. At Quicksilver's shareholder meeting in May, CEO Glenn Darden said Horn River has the potential to be "our next big, big project." Quicksilver estimates it can recover 5 trillion cubic feet of natural gas from its Barnett Shale properties. The company's Horn River Basin holdings appear capable of producing more than that, based on the company's substantial lease acreage there, Buterbaugh said. Quicksilver's experience drilling in the Barnett Shale should prove valuable at Horn River, he said, because there appear to be "many similarities . . . from a geological standpoint" between the two. Energy companies estimate that a typical Barnett Shale well might yield 3 billion to 4 billion cubic feet of gas during its producing lifetime. But Houston-based Apache Corp., which has drilled at least 28 Horn River wells along with Canadian partner EnCana Corp., projects that some Horn River wells could recover 10 billion cubic feet. Initial production high In the Barnett Shale, early production rates of the biggest "monster" Barnett wells have been about 8 million to 10 million cubic feet of gas per day. Apache, however, said three of its Horn River wells "have been brought online at gross initial production rates of more than 16 million cubic feet per day" and were still producing 8 million to 10 million cubic feet daily after two to three weeks. A July 10 report in The Wall Street Journal said Exxon Mobil officials, after drilling four Horn River test wells along with partner Imperial Oil, concluded that the basin's wells have the potential to produce 16 million to 18 million cubic feet per day. Fat pay zone Horn River has a "very thick" producing zone of 600 feet or more, said Brent Snyder, Devon Energy's exploration manager in the Canadian play. With such a fat pay zone, Devon has been drilling twin sets of horizontal wells, "one on top of the other," with one penetrating the upper part of the shale and the other the lower part, Snyder said. Devon, which has leased 153,000 acres at Horn River, is drilling wells vertically for 7,000 to 9,000 feet and extending some horizontal "laterals" more than 4,000 feet. "We are targeting 5 [million] to 6 million cubic feet of gas per day per well, but would like to achieve 10 million per day;" Snyder said. The company thus far has drilled only five test wells. Although Horn River looks promising, it has its drawbacks, including higher-cost drilling in a remote area where there is limited infrastructure such as roads and pipelines. The nearest town, Fort Nelson - which has a population of 5,000 and an economic base long centered on forestry and petroleum - is at least three hours away from where wells are being drilled. Nasty winters Winters can be brutal, with heavy snows and temperatures as low as 40 below zero, Snyder said. Nevertheless, many wells are drilled in the winter, with equipment transported on ice roads, to avoid bogging down in swamplike terrain known as the muskeg during warmer months. Horn River oilfield workers stay "largely in camps" in the field, Snyder said. Dwellings resemble dormitories or trailers connected with hallways. "They can be quite extravagant. You've got a fitness center and games center in some of them," Snyder said. Fine-tuning drilling Only several dozen wells have been drilled at Horn River. Devon and other companies expect to dramatically reduce the number of days it takes to drill wells and to substantially boost production after getting a finely honed drilling system and more roads in place, as well as learning more about the peculiar nuances of the British Columbia basin. Devon once took 30 days to drill Barnett wells but now averages about 15 to 16 days, company spokeswoman Alesha Leemaster said. It hopes for similar improvement at Horn River. While the Barnett and Horn River geologies are similar, Horn River wells have higher pressures and may go 1,000 to 2,000 feet deeper. "It's a combination of the right bit, the right mud system and the right rig," Snyder said. Some energy companies are using special rigs designed to deal with the bitter cold of the Horn River Basin. The rigs "are pretty much enclosed," he said. 32-well pad sites? To slash costs, reduce environmental impact and "minimize the amount of muskeg we have to deal with," Devon plans multiple wells at each drill site, Snyder said. "We may have up to 32 wells off of one pad, going out like the spokes of a wheel," he said. For the time being, Devon is shooting for a cost of $8 million to $8.5 million per Horn River well, roughly triple what it might cost now to drill in the Barnett Shale. The Horn River energy infrastructure is expected to improve in the next few years. Significant gas production might be realized by 2012 or so. The United States, and most specifically California, will likely be the ultimate end user for much of the Horn River gas, Snyder said. The Horn River Basin's great allure is simply "the sheer volume of gas in place," he said, with estimates ranging "anywhere from 300 [trillion] to 600 trillion cubic feet." Of that amount, at least 20 percent - 60 trillion to 120 trillion cubic feet - probably can be recovered, he said. "So the prize here is quite large," he said. Key players in the Horn River Basin Apache Corp. ConocoPhillips Devon Energy EnCana Corp. EOG Resources Exxon Mobil Imperial Oil Nexen Pengrowth Petro-Canada Quicksilver Resources Stone Mountain Resources http://www.star-telegram.com/business/story/1528613.html
patgarrett666	Marcellus activity sizzles while Barnett interest fizzles	#64	[-]
Member Posts: 11000 (08/10/09 06:46:57) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	Marcellus activity sizzles while Barnett interest fizzles BY JOHN-LAURENT TRONCHE August 10, 2009 If there's a lesson to be taken from the latest round of earnings reports from oil and gas exploration and production companies, it's this: the Marcellus Shale is the place to be. Many of the Barnett Shale's biggest operators are shifting resources toward what they see as an amazing opportunity in the Appalachian Basin play, which runs through parts of New York, Pennsylvania and West Virginia. It appears the core area - the richest area - is in southwestern Pennsylvania. "The Marcellus is the biggest of the shale gases in the United States," said Terry Engelder, a professor in the Department of Geosciences at Penn State University. How big is it compared to the Barnett Shale? "It's huge," said David Amend, investor relations manager at Range Resources Corp. "It's like 64 million acres, and the Barnett is I think somewhere around a tenth of that, depending on how you draw the line." The sheer size of the shale isn't the only thing attracting operators. Initial well results are producing far more than some expected. "The depths of both are comparable," Engelder said of the plays' respective geology. "The cost is a hair higher in the Marcellus because of such things as a rugged terrain, and the Barnett is in an urban area so that has costs of its own. But I think the bottom line … is the average Marcellus well is going to behave better than a Barnett well." Gene Shiels is assistant director of investor relations at Baker Hughes Inc., a Houston-based oilfield services and consulting firm. "One element that has helped operators focus on this is there's not a lot of uncertainty whether you're going to have a commercial well or not," said Shiels, adding there are high rates of initial production but fast depletion rates, too. "You know you're going to probably have a commercial horizontal well." It's not necessarily less expensive to drill in the Marcellus Shale or Louisiana's Haynesville Shale, another up-and-coming play, but rather that the Barnett Shale's "sweet spot" has been played out, Shiels said. "The Barnett has been around for a number of years and has been well prosecuted, if you will," he said, adding rig count peaked in the Fort Worth Basin around December 2007. "There have been a lot of holes punched out there." The Marcellus has many advantages, but perhaps the greatest is its proximity to a developed natural gas market. "The northeastern U.S. is the largest and most developed gas market in the world, so there is a price differential … where you don't have to pay for the pipeline cost of bringing it up from the coasts," Engelder said. Moving on up Range Resources is a big player in the Marcellus Shale, and hasn't been shy about what it sees as big opportunity in the northeastern U.S. gas play. The company produces more than 50 million cubic feet equivalent per day from the play, and expects to close in on 100 Mmcfe by year's end. Furthermore, the company expects to drill about 70 horizontal wells in the Marcellus Shale in 2009 and will double the amount of operating rigs to six to help reach that goal. In the first six months of the year, the company already has spent $73 million to purchase additional Marcellus Shale acreage, compared to about $15 million in the Barnett Shale. The company will significantly reduce spending in all areas in 2009, according to its second quarter earnings reports, except in the Marcellus Shale play. Finally, there are the boots on the ground. The company employed about 25 people in its regional Pittsburgh, Pa. office when it opened about two years ago. Range Resources now has about 125 in the office and expects that number to grow steadily over the next several years. Range Resources isn't alone either; Chesapeake Energy Corp. and XTO Energy Inc. both are drilling wells and awaiting results. Even before those results come in, however, the companies are investing millions of dollars in the Marcellus. Other players include EXCO Resources Inc., out of Dallas, Houston's EOG Resources Inc. and Anadarko Petroleum Corp., based in The Woodlands. "The early success from our Marcellus activities indicates this play possesses some of the most compelling economics in our onshore portfolio," said Anadarko Petroleum's Jim Hackett, president and CEO, during an Aug. 4 earnings conference call. A flurry of interest Penn State's Engelder was responsible for a university press release in January 2008 that he said made public for the first time the size of the Marcellus Shale. Since that press release, a lot of people have come knocking on his door, and he has kept statistics. Since the fall of 2007, Engelder has given 102 talks on the Marcellus Shale; spoken to 165 U.S. upstream companies, including Chevron Corp., Exxon Mobil Corp., ConocoPhillips, Devon Energy Corp., Chesapeake Energy, Quicksilver Resources Inc. and more; 13 international companies including Saudi Aramco, Total, Royal Dutch Shell, BP, Libya's National Oil Corp. and others and 51 investment firms, such as Goldman Sachs, UBS and Credit Suisse. In all, he has spoken to 6,441 people about the Marcellus. "It's one of these subjects that I spent 30 years giving talks, my talks were usually the last afternoon of the last day when everybody had gone home and I'm with the session chairman. Then two years ago these talks really started mattering," Engelder said. "You can't imagine what kind of a good feeling that is to be out in the wilderness for 30 years with no one listening and then everyone paying attention." By John-Laurent Tronche jtronche@bizpress.net If there's a lesson to be taken from the latest round of earnings reports from oil and gas exploration and production companies, it's this: the Marcellus Shale is the place to be. Many of the Barnett Shale's biggest operators are shifting resources toward what they see as an amazing opportunity in the Appalachian Basin play, which runs through parts of New York, Pennsylvania and West Virginia. It appears the core area - the richest area - is in southwestern Pennsylvania. "The Marcellus is the biggest of the shale gases in the United States," said Terry Engelder, a professor in the Department of Geosciences at Penn State University. How big is it compared to the Barnett Shale? "It's huge," said David Amend, investor relations manager at Range Resources Corp. "It's like 64 million acres, and the Barnett is I think somewhere around a tenth of that, depending on how you draw the line." The sheer size of the shale isn't the only thing attracting operators. Initial well results are producing far more than some expected. "The depths of both are comparable," Engelder said of the plays' respective geology. "The cost is a hair higher in the Marcellus because of such things as a rugged terrain, and the Barnett is in an urban area so that has costs of its own. But I think the bottom line … is the average Marcellus well is going to behave better than a Barnett well." Gene Shiels is assistant director of investor relations at Baker Hughes Inc., a Houston-based oilfield services and consulting firm. "One element that has helped operators focus on this is there's not a lot of uncertainty whether you're going to have a commercial well or not," said Shiels, adding there are high rates of initial production but fast depletion rates, too. "You know you're going to probably have a commercial horizontal well." It's not necessarily less expensive to drill in the Marcellus Shale or Louisiana's Haynesville Shale, another up-and-coming play, but rather that the Barnett Shale's "sweet spot" has been played out, Shiels said. "The Barnett has been around for a number of years and has been well prosecuted, if you will," he said, adding rig count peaked in the Fort Worth Basin around December 2007. "There have been a lot of holes punched out there." The Marcellus has many advantages, but perhaps the greatest is its proximity to a developed natural gas market. "The northeastern U.S. is the largest and most developed gas market in the world, so there is a price differential … where you don't have to pay for the pipeline cost of bringing it up from the coasts," Engelder said. Moving on up Range Resources is a big player in the Marcellus Shale, and hasn't been shy about what it sees as big opportunity in the northeastern U.S. gas play. The company produces more than 50 million cubic feet equivalent per day from the play, and expects to close in on 100 Mmcfe by year's end. Furthermore, the company expects to drill about 70 horizontal wells in the Marcellus Shale in 2009 and will double the amount of operating rigs to six to help reach that goal. In the first six months of the year, the company already has spent $73 million to purchase additional Marcellus Shale acreage, compared to about $15 million in the Barnett Shale. The company will significantly reduce spending in all areas in 2009, according to its second quarter earnings reports, except in the Marcellus Shale play. Finally, there are the boots on the ground. The company employed about 25 people in its regional Pittsburgh, Pa. office when it opened about two years ago. Range Resources now has about 125 in the office and expects that number to grow steadily over the next several years. Range Resources isn't alone either; Chesapeake Energy Corp. and XTO Energy Inc. both are drilling wells and awaiting results. Even before those results come in, however, the companies are investing millions of dollars in the Marcellus. Other players include EXCO Resources Inc., out of Dallas, Houston's EOG Resources Inc. and Anadarko Petroleum Corp., based in The Woodlands. "The early success from our Marcellus activities indicates this play possesses some of the most compelling economics in our onshore portfolio," said Anadarko Petroleum's Jim Hackett, president and CEO, during an Aug. 4 earnings conference call. A flurry of interest Penn State's Engelder was responsible for a university press release in January 2008 that he said made public for the first time the size of the Marcellus Shale. Since that press release, a lot of people have come knocking on his door, and he has kept statistics. Since the fall of 2007, Engelder has given 102 talks on the Marcellus Shale; spoken to 165 U.S. upstream companies, including Chevron Corp., Exxon Mobil Corp., ConocoPhillips, Devon Energy Corp., Chesapeake Energy, Quicksilver Resources Inc. and more; 13 international companies including Saudi Aramco, Total, Royal Dutch Shell, BP, Libya's National Oil Corp. and others and 51 investment firms, such as Goldman Sachs, UBS and Credit Suisse. In all, he has spoken to 6,441 people about the Marcellus. "It's one of these subjects that I spent 30 years giving talks, my talks were usually the last afternoon of the last day when everybody had gone home and I'm with the session chairman. Then two years ago these talks really started mattering," Engelder said. "You can't imagine what kind of a good feeling that is to be out in the wilderness for 30 years with no one listening and then everyone paying attention." http://www.fwbusinesspress.com/display.php?id=10767
EnhancedYield	Times are changing, certainly,	#65	[-]
Member Posts: 131 (08/11/09 13:59:13) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	if shale gas plays are divided into young and mature. And it's not only conventional gas in decline, since Black Blade has reported - in another thread - that the CBM industry is suffering now as well. But original resource in place is one thing, and production is another. Replacing declines in conventional plus CBM plus maybe tight sands is a tall order. The good news I suppose is that gas shales ORIP is pretty big, and only money (!) is needed to get it out. Fallen, fallen, fallen is Babylon the Great, space is getting bounded, time is getting late...
mancovaldez	Should Oil and Gas Investors Fear the FRAC Act?	#66	[-]
Member Posts: 10154 (08/19/09 22:29:36) Moderator Extraordinaire Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	Should Oil and Gas Investors Fear the FRAC Act? By Toby Shute August 19, 2009 In June, Democrats introduced the FRAC (Fracturing Responsibility and Awareness of Chemicals) Act via companion bills in the House and Senate. The FRAC Act seeks to amend the Safe Drinking Water Act so that hydraulic fracturing would be regulated on a federal level. Hydraulic fracturing is the technique that, combined with horizontal drilling, has allowed domestic E&Ps like Devon Energy (NYSE: DVN), Southwestern Energy (NYSE: SWN), and XTO Energy (NYSE: XTO) to unlock massive shale deposits like the Barnett and the Fayetteville. Big Oil's lobbyist, the API, has been hootin' and hollerin' about the implications of federal frac fluid oversight, saying that domestic production would drop "significantly" if servicers like Halliburton (NYSE: HAL) and Baker Hughes (NYSE: BHI) had to report the chemical components added to the water that's pumped downhole and used to fracture hydrocarbon-bearing rock. One industry estimate puts the additional cost of compliance at $100,000 for each new natural gas well. Big Oil (and especially Small Oil), you know I often stick up for you, but I suspect you're crying wolf this time. The oil patch is an extraordinarily entrepreneurial place. If certain chemicals are banned from frac fluid, I have every confidence that the contractors will be able to formulate an alternative that doesn't break the economics of the stimulation job. Further, that compliance estimate sounds like a serious exaggeration. Why am I sympathetic to this legislation? For one, state regulatory bodies can become quite cozy with industries that drive the local economy. Second, while the risk of polluting an aquifer seems remote, given that most horizontal drilling occurs much deeper in the earth, I do recognize that there are some rather nasty chemicals involved here, and they have been and will continue to be spilled on the surface. That poses enough of a threat to drinking water to get me concerned. According to local media reports, a recent frac job performed by Schlumberger (NYSE: SLB) for Chesapeake Energy (NYSE: CHK) in the Haynesville shale play saw some frac fluid spilled, and 17 cows died. To be clear, the outright ban of hydrofracking would strike an incredibly damaging blow to the industry and to our domestic energy supply (hello, Russian gas imports!), but I don't foresee such a threat to the overall practice. No matter what your opinion of members of Congress, I don't think any of them are that stupid. As far as better chemical disclosure goes, I'm all for it. Let's just make sure that our representatives realize what a good thing we have going with shale gas, and that they don't strangle the goose that's laying golden energy eggs.
patgarrett666	Enerplus to buy U.S. shale gas properties	#67	[-]
Member Posts: 11000 (08/20/09 07:42:12) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	Enerplus to buy U.S. shale gas properties CP Last updated on Thursday, Aug. 20, 2009 02:56AM EDT Enerplus Resources Fund, a Calgary based oil and gas trust, is paying $406-million (U.S.) to three private natural gas producers to acquire nearly a third of their stake in the Marcellus shale natural gas resource play in the northeastern United States. Enerplus said late yesterday it had struck agreements with Chief Oil & Gas LLC and its affiliates Chief Exploration & Development LLC and a limited partnership managed by Tug Hill Inc. to acquire 30 per cent of their interests in the Marcellus play. Chief currently owns an average 72 per cent working interest in 540,000 gross acres of property, most in Pennsylvania within the heart of the Marcellus shale zone. The company operates the prospect. When the $444-million (Canadian) acquisition closes, Enerplus will own an average 21.5 per cent non-operated working interest in the gas fields. ERF.UN (TSX) fell 14 cents to $22.59. http://www.theglobeandmail.com/report-on-business/enerplus-to-buy-us-shale-gas-properties/article1258174/
patgarrett666	Baker Hughes bets on shale gas with deal	#68	[-]
Member Posts: 11000 (09/01/09 05:29:32) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	Baker Hughes bets on shale gas with deal Sep 01, 2009 04:30 AM HOUSTON-Baker Hughes Inc. agreed to buy BJ Services Co. for $5.5 billion (U.S.) in a bet on U.S. natural-gas shale formations. BJ Services is the third-biggest provider of so-called pressure-pumping services, used in unconventional gas plays such as shale formations to break up rock and stimulate production. Pressure pumping made up less than 1 per cent of Baker Hughes 2008 revenue, but is expected to comprise about 20 per cent of the company's revenue after the deal is complete. ``They're buying an asset that is highly correlated to a rebound in natural-gas prices, and they look to benefit as to what they hope to see as higher activity rates for land rigs somewhere down the line,'' said Ted Harper at Frost Investment Advisors in Houston. The takeover is the biggest since 1998, when Baker Hughes acquired Western Atlas Inc. for $6 billion. http://www.thestar.com/business/article/689057
patgarrett666	Marcellus Shale drilling activity robust despite low natural gas prices	#69	[-]
Member Posts: 11000 (09/01/09 05:39:26) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	Marcellus Shale drilling activity robust despite low natural gas prices By Rick Stouffer TRIBUNE-REVIEW Tuesday, September 1, 2009 The number of natural gas wells permitted and drilled in the Marcellus Shale formation, including Western Pennsylvania, continues to climb despite the lowest natural gas prices in seven years, officials said. Companies and industry experts say the close proximity of the Marcellus region to the huge East Coast natural gas market and lower drilling costs due to a recession-caused slowdown nationwide combine to keep activity humming here. "We anticipated we would issue 700 Marcellus Shale drilling permits for the year, but we surpassed that figure before midyear," said state Department of Environmental Protection spokesman Tom Rathbun. Through Aug. 21, the DEP issued 1,067 Marcellus Shale drilling permits. That compares to 476 drilling permits issued for all of last year. The number of Marcellus Shale wells drilled through Aug. 21 totaled 283, up 45 percent from 2008's 195 total. Low natural gas prices have yet to slow Marcellus drilling activity, though some companies working here are retrenching in other areas of the country. Even a possible shortage of natural gas storage may not slow Marcellus activity, experts said. "The production costs for shale plays in the Rocky Mountains probably are $1 or $2 more per thousand cubic feet of natural gas compared to the Marcellus," said Mary Novak, managing director of Energy Services for IHS Energy Insight, of Lexington, Mass. "The market right now is bad in terms of prices, but operators in the Marcellus have an advantage in that they garner high prices due to their location in relation to the East markets," said Rick Gordon, an independent oil and natural gas consultant based in Overland Park, Kan. The Marcellus is a level of shale deep under about 65,000 square miles of territory in portions of New York, Pennsylvania, West Virginia, Ohio and Virginia. Latest estimates indicate it may hold enough natural gas to meet the country's needs for more than a decade. Today, about 51 companies have staked a claim in the formation, including 20 of the country's top 100 operators and two of the top three. Independent exploration-production companies such as Range Resources Corp. of Fort Worth, EOG Resources Inc. of Houston, Anadarko Exploration & Production Co. LP, of The Woodlands, Texas, and Ultra Resources Inc. of Englewood, Colo., are paying $3 million to $4 million per well to tap the Marcellus. The Energy Information Administration reported last week that the amount of natural gas in storage hit 3.26 trillion cubic feet, the highest amount on record for August, enough to meet the country's natural gas needs for 54 days. Storage capacity nationwide is thought to be about 4 trillion cubic feet, but that's an estimate because the industry never has reached that figure. http://www.pittsburghlive.com/x/pittsburghtrib/business/s_640927.html#
patgarrett666	Water quality worries could slow shale drilling	#70	[-]
Member Posts: 11000 (09/02/09 05:48:18) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	Water quality worries could slow shale drilling A gas drilling site on the Marcellus Shale is seen in Hickory, Pennsylvania February 24, 2009. Tue Sep 1, 2009 1:47pm EDT By Joe Silha - Analysis NEW YORK (Reuters) - The boom in shale gas drilling has raised hopes the United States will be able to rely on the cleaner-burning fuel to meet future energy needs, but concerns about its impact on water quality could slow industry's ability to tap this relatively new resource. Natural gas is the cleanest burning fossil fuel, emitting about half as much carbon dioxide as coal. For more than a decade it has been the fuel of choice to heat homes and for businesses to generate power. Many now see gas as a bridge fuel that can drive growth as the economy transitions to cleaner alternatives like wind and solar. But fears that drilling techniques used to fracture the gas-bearing rock could contaminate local drinking water threaten to slow development. "Environmental concerns do have the potential to slow down shale gas development, but I think the slowdown will be more of a short-term problem," said Robert Clarke, product manager of Wood Mackenzie's unconventional gas service in Houston. "There have been challenges in the past about drilling technology or well stimulation technology and the industry has addressed each one of those successfully," Clarke said. Some environmental groups want tighter regulations on air emissions and water disposal and limits on the number of wells that can be drilled in a location, but Clarke said the industry already has taken steps to address some of these concerns. Horizontal drilling, for example, allows producers to drill multiple wells from one well pad. On-site water recycling has cut the amount of water needed in drilling and the number of trucks needed to cart water away from the drill site. In addition, he said some rigs and compressors are now powered by electric motors, reducing noise and air pollution. AN UNEXPECTED BOOM Earlier this decade U.S. producers were struggling to find new natural gas supplies to keep up with growing demand, as rapid depletion of conventional wells stirred fears of a shortfall in supplies. While producers were well aware of the vast reservoirs of shale gas in North America, much of that supply was thought to be uneconomical until recent advances in horizontal drilling and rock fracturing techniques made production more viable. Now shale gas, or gas trapped in sedimentary beds, is seen as having the potential to provide the United States with affordable fuel that will help drive economic growth, reduce dependence on foreign oil and limit emissions for decades. The United States is estimated to have some 2,000 trillion cubic feet of technically recoverable natural gas reserves, or enough gas at current production rates to supply the country for more than 90 years. U.S. gas reserve estimates are up more than a third since 2006. Shale accounts for more than 30 percent of the total thanks to upward revisions in some key shale basins like Haynesville in Louisiana or Marcellus in Appalachia. "From a natural gas perspective, energy independence is definitely a goal that can be attained," said Gary Adams, vice chairman at accounting and consulting firm Deloitte. GROWING ENVIRONMENT CONCERNS But concerns have been growing about the impact of shale drilling on water quality. Some in the industry fear new laws could raise drilling costs to levels that discourage future development. "Another layer of federal regulation could make our own resources uneconomical and increase our dependence on foreign countries," Deloitte's Adams said. Hydraulic fracturing, also known as fracking, pumps a mixture of water, chemicals and proppants like sand into the shale formation to split the rock and free the trapped gas. It takes significant amounts of water to produce gas from shale, but casing and cement are installed when the well is drilled to protect ground water and help recapture any of the fluids that return to the surface as gas is produced. While the chemicals used may be only a small part of the fracking fluid mix, some are considered toxic or are known causes of cancer, raising concerns about the potential for ground water contamination. The U.S. Environmental Protection Agency recently found chemical contaminants in some drinking water wells in Wyoming that may have been caused by gas drilling in the area. Federal laws like the Clean Water Act, the Clean Air Act and the Safe Drinking Water Act are supposed to address many of the environmental concerns about shale drilling. There are also numerous state laws that regulate drilling activities. But critics say the industry needs tighter scrutiny, claiming there are too many loopholes in some federal laws, while state regulations and enforcement can vary widely. "We think gas is an important fuel as we transition toward a cleaner energy future. We're not out to put anybody out of business, but we believe there are cost-effective technologies available that will allow industry to do their work cleaner," said Amy Mall, senior policy analyst at the Natural Resources Defense Council, an environmental group. http://www.reuters.com/article/GCA-GreenBusiness/idUSTRE58054Z20090901
patgarrett666	'Oil' men migrate north seeking Marcellus riches	#71	[-]
Member Posts: 11000 (09/06/09 08:55:29) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	'Oil' men migrate north seeking Marcellus riches TOM WILBER / Staff Photo Kent Fullerton, a salesman for Wellhead Distributors International, is among gas and oil industry tradesmen from Texas looking for new opportunity in the northeast. By Tom Wilber twilber@gannett.com ERIE, Pa. - The Marcellus Shale may be one of the largest natural gas resources in the world, but to Kent Fullerton, it's an oil patch. The 45-year-old Houston native has been in the drilling business almost his entire life. Now a salesman for Wellhead Distributors International, he is among seasoned industry tradesmen from places like Texas and West Virginia who have headed to the Northeast in search of Marcellus riches. This week, it's taken him to a trade show in Erie. Next stop may be Broome County. Things are different up here. Technical and regulatory issues abound. Cultural and operational differences have to be bridged. Fullerton spent two days last week at Bayfront Convention Center in Erie with about 500 other technicians, tradesmen, salesmen, regulators, consultants, managers and executives. The Pennsylvania Oil & Gas Association organized the event, which saw record participation from firms with their sights set on Marcellus, a massive gas reserve extending into Broome County from the heart of the Appalachian basin. International firms, such as Schlumberger, a well-field services company headquartered in Houston, shared the trade show floor with industry newcomers and local firms looking to capitalize on Marcellus-related business. "Everybody is trying to establish their niche," said Jackie Root, an attendee. A land-lease specialist, Root engineered a $110 million deal between XTO Energy and Deposit area residents last spring. Some were newcomers trying to establish a toehold. "So many industries want to be a part of it," said Arlene Dodson, director of business development for Fairway Laboratories, an environmental testing firm from Altoona. Some, like Schlumberger, are international giants looking to expand their empire. Schlumberger is already in setting up an outpost in Horseheads that could bring 400 jobs to the area. Fullerton was part of a well-represented contingent at the conference from the southern and western territories tracking business shifting to the Northeast with the Marcellus. WDI is looking to open a new facility in northeast Pennsylvania or perhaps the Southern Tier. New customs It's a long way from Texas, culturally and geographically. For starters, there's the language. In Texas, if you drill it for energy, it's an oil patch. "Doesn't matter if it's gas," Fullerton said. "Doesn't matter how big." A warehouse is a yard. Getting the job right is making a hand. The vernacular is charming enough. Fundamental difference in work habits and attitudes may turn out to be less so. Drilling operators are now drawing from a labor pool of factory workers used to shift work in the traditionally unionized rust belt and northeastern towns and cities. Those workers may have a hard time adjusting to an industry reared in Texas, where roughnecks and cowboys define the work ethic. "Not that there is anything wrong with unions," Charlie Adams, WDI vice president of operations quickly added. "They've done a lot of good." Fullerton smiled, but only slightly. "It's going to be a north-south mentality from time to time," he said, noting how shift workers are used to going home after they punch the clock. That doesn't happen so much on drill rigs. Work at the oil patch never stops. Sometimes, though, operators in Pennsylvania have found a lack of urgency at a local machine shop hired to manufacture a piece of hardware for a rig broken down in the middle of the night. For those willing to "make a hand," Fullerton said, there's plenty of opportunity. "It's getting them in the right mindset." Don't cut corners Geography and landscape are also taking some getting used to. In Texas, moving a derrick involves perching each end on a truck and off it goes down the road. There's plenty of space to turn around, make corners and pull off. Nobody makes too much of a fuss. That's not so easy with the topography and infrastructure of the Southern Tier and northeastern Pennsylvania. "A rig move here is a big thing," Adams said. "A moving rig ain't making money." More things have to be taken apart and put back together. It's slow going. "You feel pressure when people are waiting on you," Fullerton said. That pressure has to be balanced with keen awareness of what can happen when corners are cut. In an adjoining conference room, Brian Krause, vice president of oil & gas for Travelers Insurance, brought that point home. His presentation, "Blow-outs, your worst nightmare," was filled with dramatic tails of death and disaster, illustrated with a vivid slide show of well derricks disappearing in towering fire balls. Blow-outs happen every year - some with more devastating consequences than others. While they represent a small fraction of tens of thousands of wells drilled annually, the industry can do better in anticipating and preventing them, Krause said. His take-home message: Carelessness invites disaster. In the gas industry, the consequences are costly and often fatal. His style was colorful, with tales of the late Red Adair, Krause's mentor, portrayed by John Wayne in the 1968 movie, Hellfighters. By Krause's sometimes facetious account, throngs of lawyers typically arrive on a disaster scene with emergency responders and ride around in the back seats of their clients' cars as they are evacuated. Meanwhile, hovering media helicopters broadcast the event to the world. "You have to talk to the media," he warned. "If you don't, they will find the dumbest guy on the rig and stick a microphone in front of him and he will say, 'Oh yeah, this rig has been getting ready to blow for weeks.'" Know the people In addition to taking necessary steps to prevent accidents, an effective policy must be in place to deal with the public as well as the emergency itself. "How you interact with those people, how you meet their needs, becomes a very important part of how you handle the event," he said. Throughout the two-day conference, presentations continued on topics including wastewater permitting, disposal wells, and world and domestic markets that influence gas prices and businesses. Vendors showcased their wares, including trucks, valves, pumps and pipes. While there was plenty of glitz and enthusiasm, federal and Pennsylvania state regulators provided a sobering influence with updates about newly formed policy (some still in the process of being developed) dealing with water consumption, waste disposal and permitting. There was little applause and plenty of questions following those presentations. Judging from 169 vendors who rented space to showcase their services and 500 conference goers, expectations for the Marcellus remain high. How that development will come together, and who stands to lose or gain the most, remains to be known. While industry players and regulators from the north and south work it out, a broader question persists. How will the general public adapt to an industry woven into the cultural fabric in Texas, but seen by many Yankees as an intrusion? "People will hate us, until they get used to us," Fullerton said.
patgarrett666	In glut, EnCana's big find untapped	#72	[-]
Member Posts: 11000 (09/10/09 06:36:11) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	In glut, EnCana's big find untapped Company won't develop third-largest field until demand recovers and that will take a major market shift SHAWN MCCARTHY 00:00 EDT Thursday, September 10, 2009 OTTAWA -- GLOBAL ENERGY REPORTER EnCana Corp. is touting the Horn River shale deposits in British Columbia as the continent's third-largest natural gas field, but needs a fundamental market shift to make it commercially attractive. EnCana's dilemma is reflected across North America - natural gas companies are bullish on new sources of shale gas, but that very prospect of new production is driving down prices to the point where development is uneconomic. With North America's glut of gas showing no signs of abating, producers need a structural change in the energy markets - with more demand from new natural-gas-fired power plants and the broad adoption of natural gas vehicles - to boost the long-term demand for their fuel. Even with depressed prices, the national gas industry likely faces a long wait for demand to rebound to its pre-recession level, let alone grow significantly beyond that. And so producers are faced with the unhappy prospect of being forced to slash production in order to prop up prices. At an investment conference in New York yesterday, EnCana executive vice-president Mike Graham said drilling results in the remote northeastern corner of the province suggest the Horn River basin could hold as much as 500 trillion cubic feet of gas in place. Further confirmation of the Horn River potential is a boon for B.C., which stands to reap economic benefits from eventual production from the basin. But at current gas prices, EnCana would be unlikely to develop its Horn River properties. It says Horn River needs prices of at least $6 for 1,000 cubic feet to be commercial. On the New York Mercantile Exchange yesterday, natural gas for delivery in October closed at $2.84 (U.S.) per mcf. EnCana expects the market to eventually recover to the point where it can tap the high-cost Horn River field, which requires expensive pipelines to get the gas to market. "You have this great success in bringing on more supply [across North America] and that came to the fore just as the economy turns and so demand dropped off," EnCana spokesman Alan Boras said. "Over time, we would anticipate that prices will recover ... to a level where we believe we can bring on these new supplies." One sign of the glut: Storage facilities in the United States are virtually full. Analysts warn that, without dramatic production cuts this fall, gas prices will plunge even further once producers can no longer inject gas into storage. Typically, a bust in the natural gas market would carry the seeds of its own recovery: Low prices force companies to slash drilling and shut in production, but also encourage consumers to use more gas. That rebalancing could take years, especially if North America experiences another relatively mild winter. "We will probably have a situation where - for the next five or six years - we will have abundant supplies of natural gas," said Mary Novak, energy economist with IHS Global Insight Inc. However, conventional production in both the U.S. and Canada is expected to decline rapidly in the coming years, due to low prices and the maturing gas fields. So, eventually, the market will tighten again. "It's not like we're going to be awash in natural gas for the next 30 years." In a forecast released yesterday, the U.S. Energy Information Administration said U.S. gas production - which climbed sharply in 2008 - rose another 0.9 per cent in 2009 but should fall by 3.5 per cent next year as a result of a 45-per-cent drop in drill rig activity since the start of the year. In Canada, companies have begun shutting in wells as prices have fallen below levels where production is profitable, says Martin King, an analyst with First Energy Capital in Calgary. He estimates that as much as one billion cubic feet per day of Canadian production will be taken off the market this fall, and those cuts should be enough to stem the price slide. On the demand side, the IEA forecast that U.S. natural gas consumption will decline by 2.4 per cent this year and remain flat next year. One bright spot: While power generation was off 4.5 per cent for the first half of the year, natural gas consumption in the power sector actually grew by 3 per cent. However, demand in the U.S. power sector should actually decline over the next few years as new coal-fired plants come on stream, said Amber McCullagh, a Houston-based gas market analyst with Wood Mackenzie. While some fuel switching occurred in the power sector, residential, commercial and industrial consumers are less able to respond to low gas prices, and the industry expects little growth from those markets beyond a normal rebound from recession. One key unknown: To what degree will government policy encourage power utilities and transportation networks to use natural gas as a low-carbon fuel? The industry in both Canada and the U.S. insists that natural gas is an attractive alternative to coal in the power sector and to oil in transportation. But governments so far have focused their attention on renewables and conservation, and on electric cars and gasoline-electric hybrids. "We think of natural gas as part of the low-carbon solution and not an impediment," said Chris McGill, managing director of policy analysts, for the American Gas Association in Washington. "We're not waiting for any huge technological advance or draconian measure ... and we believe we can meet market requirements with a domestic, secure, North American supply, to be sure." EnCana (ECA) http://www.globeinvestor.com/servlet/story/GAM.20090910.RNATGAS10ART1941/GIStory/ Last Edited By: patgarrett666 09/10/09 06:42:54. Edited 1 times.
mancovaldez	EnCana Shale Plays Bode Well	#73	[-]
Member Posts: 10154 (09/10/09 23:18:26) Moderator Extraordinaire Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	EnCana Shale Plays Bode Well By Zacks Equity Research On Thursday September 10, 2009, 12:41 pm EDT EnCana Corporation (NYSE: ECA - News) has recently said that a significant exposure to the Horn River shale play (in a remote corner of northern British Columbia) should add substantial value to the company in the future. This shale play could hold as much as 500 trillion cubic feet (Tcf) of natural gas. The Horn River shale play ranks among the largest gas finds in North America as exploration in the region firms up its potential. It is the third largest shale play after Marcellus and Haynesville, having 1,500 Tcf and 717 Tcf of gas, respectively. With partners such as Apache Corporation (NYSE: APA - News), EOG Resources (NYSE: EOG - News) and Devon Energy Corporation (NYSE: DVN - News), the Horn River shale play has revolutionized North America's natural gas industry. EnCana has built considerable land positions in different emerging shale plays, which add significant depth to its strong portfolio of natural gas assets across North America. As of year-end 2008, the company had approximately 260,000 net acres of producing acreage in the Horn River Basin and evaluated 15 wells, 9 of which have been placed on long-term production. Year-to-date, a total of 40 wells have been drilled in this shale play. EnCana's resource plays continue to provide excellent performance, driven by its industry-leading positions in plays such as the Deep Bossier formation of East Texas, the emerging Montney formation of Cutbank Ridge in northeast British Columbia and the Jonah formation in Wyoming. With its industry-leading inventory of long-lived unconventional oil and gas assets and solid production hedging program at attractive price, EnCana remains focused on capital discipline and free cash flows. However, we believe that all these positives are already priced in, leaving little room for upside from current level. As such, we rate the company as Neutral. ENCANA CORP (ECA): Read the Full Research Report APACHE CORP (APA): Read the Full Research Report EOG RES INC (EOG): Read the Full Research Report DEVON ENERGY CORP NEW (DVN): Read the Full Research Report
eskardu	Should US majors should be rushing into shale gas?	#74	[-]
Member Posts: 6033 (09/14/09 13:08:58) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	Should US majors should be rushing into shale gas? September 14, 2009 5:02pm by Sheila McNulty In the past year, a growing number of foreign energy companies have bought into the US natural gas scene through joint venture deals with independents to gain access to what is turning out to be a huge new fuel source. Analysts estimate that the independents have grown US supplies, using new technology and expertise, to 100 years worth of natural gas, up from about estimates of about 30, just three years ago. Yet it is interesting to note the US majors have been left out of this joint-venture activity, continuing to focus on the deep-water Gulf of Mexico and, mostly, overseas. ConocoPhillips' revelation in recent days that it is moving to take over the 50 per cent stake held by Petroleos de Venezuela, Venezuela's state oil company, in a joint venture processing crude at a Texas refinery because PDVSA has defaulted on supply contracts underlines the value of the US gas play. Had PDVSA been American, this dispute would have been settled a long time ago. And the chances of the US nationalising assets is slim to none. Conoco says that, under the terms of their joint-venture agreement, PDVSA was to suply most of the crude processed by this joint venture. However it has not supplied crude oil since the beginning of the year. So Conoco has just notified PDVSA that it would exercise its rights under the terms of the joint venture agreement to acquire PDVSA's interest in the joint venture. PDVSA can turn over its interest or dispute the claim and both sides can go to court. Indeed, that is likely to be the way things will go. For the companies have been in conflict with one another since Venezuela nationalised its oil sector and took control of Conoco's assets there, forcing the company to report at $4.5bn charge in 2007. And it is not the only one having troubles with the government of Hugo Chavez. ExxonMobil also has been entrenched in a legal dispute with Venezuela since then. And, of course, such disputes are not confined to Venezuela. What this latest twist reminds us, though, is that foreign countries hold most of the world's oil and, therefore, accessing those resources involve resource nationalism at its worst. Look around in Russia or Africa for examples. But the US has a growing supply of natural gas with some fields big enough to engage the majors for many years to come. They do not have to deal with such contract disputes. Foreigners have seen the value of the US gas play and moved in aggressively in recent months. BP, the UK oil giant, has led the push. But BG Group, StatoilHydro and Eni also have been first movers, paying the US independents, who are heavily entrenched in US natural gas, to not only share the spoils but teach them how best to access them by themselves. The US majors seem so focused on negotiating with foreign governments to access resources abroad that they cannot see the value in their own backyards. Or can they? With natural gas prices now below $3, perhaps they are making the right decision. After all, how long can these little independents hold on? Perhaps they will be willing to take a lower price from ExxonMobil, Chevron and ConocoPhillips in a few more months. Yet maybe not. If natural gas prices begin to recover, the US majors may well find themselves having missed a golden opportunity. Because it should not be long before Congress and the Obama Administration realise the US' hopes of transforming the country into one run on renewables is not going to happen any time soon. And that is where many believe natural gas will come into play. Natural gas is the least carbon intensive of the fossil fuels, but also plentiful, available in the US and already provides about 20 per cent of US energy. Its production can be is ramped up to meet increasing energy needs. While the estimates of 100 years worth of supply may, in the end, turn out to be inflated, there is no doubt US natural gas is the biggest contender to being a bridge fuel to renewables. Will US majors be in on the crossing? Related links: Shale gas scepticism, and shale gas enthusiasm (FT Energy Source, 03/09/09) Natural gas, not so unstoppable after all? (FT Energy Source, 27/08/09) Natural gas fighting difficult battle in Washington (FT Energy Source, 10/08/09) "All Is Well"
mancovaldez	And Yet Another Shale Play In North America	#75	[-]
Member Posts: 10154 (09/15/09 23:38:43) Moderator Extraordinaire Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	And Yet Another Shale Play In North America Posted: Sep 15, 2009 10:53 AM by Eric Fox As if the fundamentals in the natural gas market weren't bad enough, the industry is on the verge of developing yet another multi trillion cubic feet shale play in North America. Where all this gas will go is anyone's guess at the moment. The Horn River Basin shale play is located in the British Columbia region of Canada. The area was highlighted recently by an announcement from Exxon Mobil (NYSE:XOM) back in July 2009, of the enormous potential based on four test wells drilled there by the company. The company said that it was seeing initial production (IP) rates of 16-18 million cubic feet per day and has 250,000 acres under net lease. Another company active in the Horn River basin is EnCana Corporation (NYSE:ECA), which has 260,000 acres under its control and has been building its position since 2003. The company used the figure of 500 trillion cubic feet (TCF) of natural gas for the entire basin, and has been working to finalize the technique needed to develop this resource. EnCana has moved from vertical test wells in 2003 to the 14 stage hydraulic fracturing it will be doing on its horizontal wells in 2009. EnCana is partnered with Apache Petroleum (NYSE:APA) in this basin. Nexen (NYSE:NXY) has an 88,000-acre position in the play. The company has only seen IP rates of 2.1 million cubic feet per day on its wells, but it has used only two-stage hydraulic fracturing to date. EnCana and Nexen are both Canadian companies, but don't think that U.S. companies have been shut out. EOG Resources (NYSE:EOG) has 157,500 net acres under lease and has sevens wells being completed currently. Devon Energy (NYSE:DVN) has 153,000 acres but has barely touched its acreage since it is so busy developing its core areas. The company only has one producing well so far. Access to infrastructure is always a problem in fast growing resource plays, and the Horn River Basin is no exception. Spectra Energy (NYSE:SE) is expanding its gathering and processing plant at Fort Nelson to handle the increased production. A new facility is also planned for the region, and the company has already contacts for 790 million cubic feet per day of capacity. It seems just a few years ago, every "expert" out there said it was impossible to grow natural gas production. We now may be on the other side of the slope, a situation where the industry can't stop growing, no matter how full inventories get and how low the price goes for natural gas. (For more, check out our Oil And Gas Industry Primer.)
mancovaldez	Natural Gas Drilling Cos Upping Ante on Land Leases	#76	[-]
Member Posts: 10154 (09/16/09 22:28:04) Moderator Extraordinaire Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	Natural Gas Drilling Cos Upping Ante on Land Leases by David Falchek, The Times-Tribune, Scranton, Pa. Knight Ridder/Tribune Business News 9/16/2009 Hours after failing to land a lease with 600 Friendsville Group property owners, Chesapeake Energy sought to lure landowners away from the company that did. Fortuna Energy Inc. of Horseheads, N.Y., made a $165 million bid to become a major player in the Marcellus Shale, reaching an agreement with the Friendsville Group that would pay property owners $5,500 per acre and 20 percent royalties, perhaps the most lucrative Marcellus natural gas lease to date. After the group's negotiating committee accepted Fortuna's offer in Choconut, Chesapeake made a blanket offer of $5,750 per acre with the same 20 percent royalty. Chesapeake is also willing to forgo a renewal option in the Fortuna lease, so if land isn't drilled in five years, property owners are free to lease their land to someone else. Group members have the right to sign with anyone. Fortuna general counsel Mark Scheuerman declined to comment on Chesapeake's offer. But he has said he's confident that the Friendsville committee's endorsement and the lease terms will deliver the minimum 20,000 acres Fortuna wants as a contingency of the lease. Fortuna has some advantages, and more reason to pay a premium to get into the Marcellus than western-based companies. Fortuna, a subsidiary of the Alberta, Canada-based Talisman Inc., is based just across the state border. The company resisted making earlier forays into the region, holding onto its capital and waiting for the right deal, and better proof of the productivity of Marcellus wells. A moratorium on drilling in New York state added to Fortuna's eagerness for a deal across the border. The company, with 20 active wells in Tioga and Bradford counties, expects to have 40 by the end of 2009 and plans for 100 more in 2010. Fortuna is the largest natural gas producer in New York. The flurry of offers has created confusion among some in Friendsville Group, said Scranton environmental and energy attorney Steve Saunders, who has clients within the group asking him to review the competing offers. "Each individual has to review the competing offers," said the Friendsville Group's attorney, C. Warren Trainor, who helped write the Fortuna lease. Low natural gas prices have done little to dampen exploration companies' enthusiasm for Marcellus Shale or drop lease prices. In the early days of the economic collapse, lease rates fell to $500 per acre, down from about $2,500 per acre. "They've seen the production rates from the Dimock wells that have been on line for years," Mr. Saunders said. "The numbers are high, decline rates are low and the shale not as hard to get through."
patgarrett666	Newest high-tech business? Oil and gas	#77	[-]
Member Posts: 11000 (09/17/09 13:07:05) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	Newest high-tech business? Oil and gas New drilling and production technology has dramatically transformed North America's natural gas industry by unlocking massive shale gas reservoirs. Now, those technological advances are being adopted more broadly in the oil and gas industry to reduce costs in mature or difficult-to-tap fields SHAWN McCARTHY TORONTO - From Thursday's Globe and Mail Last updated on Thursday, Sep. 17, 2009 11:49AM EDT New drilling and production technology has dramatically transformed North America's natural gas industry by unlocking massive shale gas reservoirs. Now, those technological advances are being adopted more broadly in the oil and gas industry to reduce costs in mature or difficult-to-tap fields. Service companies have, over the past five years, made huge strides in so-called fracturing techniques, which are used to stimulate oil and gas production from the rock in which the hydrocarbons are trapped. Together with drilling advances, a variety of technologies have allowed producers to tap long-discovered gas reservoirs in shale rock, including the prolific Barnett, Haynesville and Fayetteville fields in the United States, and the Montney and Horn River plays in Canada. But the technology has applications far beyond the shale plays. As a result of the advances, "every operator in the Western Canadian basin can do more with what they own," John Deilwart, chief executive officer of ARC Energy Trust, told an investors' conference yesterday. Canadian gas producers face enormous challenges with depressed prices and a supply glut that forecasters believe will keep pressure on prices for at least the next year. Producers like Paramount Energy Trust and Progress Energy Resources Corp. boast that they are low-cost producers, but are nonetheless shutting in gas production - keeping it in the ground - in anticipation of higher prices. Companies are continuing to explore or develop new fields, albeit at a slower pace than they did a year ago, and smaller producers are eagerly anticipating asset sales by giants like Suncor Energy Inc. and EnCana Corp. in the expectation they can snap up some relatively cheap reserves that fit with their portfolios. While conventional production of oil and natural gas is still forecast to decline in Western Canada, companies are employing new strategies to stem the fall, including squeezing more production from mature reservoirs and developing previously uncommercial reservoirs in deep, tight formations. ARC Energy is developing properties in the Montney shale region of northeastern British Columbia, but is also looking to employ new drilling and fracing techniques in Alberta's mature fields, like the Pembina structure centred 65 kilometres southwest of Edmonton. "Technology is everything in our business today because the reserves are limited, but we have a big resource, and so for areas like Western Canada that are mature, the leverage of technology is enormous," Mr. Dielwart said after a presentation at the Peters & Co. Ltd. oil and gas conference. He expects the industry to make further advances that will allow companies to pinpoint their drilling, to maximize recovery from mature or difficult fields, and to improve overall productivity. High-tech fracing is costly, eating up about 40 per cent of ARC's development costs at its Dawson play in the Montney area. But it also results in more production per well, thereby reducing the average cost for each 1,000 cubic feet of gas produced. Industry executives at the Peters conference said they remain optimistic about the industry's future in Western Canada, and expect prices to recover to profitable levels by the end of 2010. Companies that focus on the shallow gas production in Alberta say investors are undervaluing those assets in the mistaken belief that the conventional side of the business is in a death spiral. "We're not dead yet," joked Susan Riddle Rose, Paramount Energy's chief executive officer. Paramount has been successful at replacing its reserves, even as distributes much of its cash flow to unitholders of the trust. Ms. Rose said Paramount, like several of its mid-sized competitors, will consider acquisitions as EnCana and Suncor shed assets. "I think it's a great opportunity for us because the assets that will be disposed of are the ones that we actually are very good at managing," she said. http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/newest-high-tech-business-oil-and-gas/article1290846/
eskardu	Natgas execs seek disclosure of Marcellus drilling chemicals	#78	[-]
Member Posts: 6033 (09/25/09 12:11:40) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	Natgas execs seek disclosure of Marcellus drilling chemicals Thu Sep 24, 2009 5:42pm EDT * Chesapeake, Range Resources call for disclosures * Marcellus Shale a key natural gas development * Industry says hydrofracturing process safe By Matt Daily NEW YORK, Sept 24 (Reuters) - Two top U.S. natural gas producers called on the industry to release data about the chemicals they use in the fast-growing Marcellus shale development to counter fears it was polluting water supplies. The Marcellus, which stretches from West Virginia across most of Pennsylvania and into New York, could hold a 10-year supply of natural gas for the United States, but its development is sparking a backlash from some residents who say they are at risk. New technologies have enabled gas drillers to tap into rock deposits and release natural gas using a process called "hydrofracturing" that injects water and chemicals into the deposits. The vast energy potential of the field has drawn interest from dozens of companies, including Chesapeake Energy (CHK.N: Quote, Profile, Research, Stock Buzz), who says the process is safe and will turn the Marcellus into a lucrative source of natural gas for decades. "We as an industry need to demystify (hydrofracturing)," Aubrey McClendon, chief executive and chairman of Chesapeake, told an energy conference this week. "We need to disclose the chemicals that we are using and search for alternatives to the chemicals we are using," he said. Scientists have yet to find definitive evidence that drilling chemicals have seeped into ground, but dozens of anecdotal accounts have emerged that water supplies in gas-producing areas have been tainted. People in gas-drilling areas say their well water has become discolored or foul-smelling, killing pets and farm animals who drink it and causing children to suffer from diarrhea and vomiting. On Tuesday, Pennsylvania regulators cited Cabot Oil & Gas for spilling chemicals at a natural gas well. [ID:nN22368094] Environmentalists have complained that the energy companies refuse to disclose the specific chemicals used in the fluids that are injected into wells and then later stored in pools before undergoing treatment. That lack of disclosure prevents them from testing water and soil samples for specific incidents of pollution. John Pinkerton, chief executive of Range Resources Corp (RRC.N: Quote, Profile, Research, Stock Buzz), one of the first energy companies to enter the Marcellus, said producers' disclosures were limited by the oilfield service companies who do not want to release what they consider to be commercially sensitive information. "We're under confidentiality contracts with the service companies," he told Reuters. "I've basically told them that this is not acceptable. It's a little silly to be honest." Oilfield service companies such as Schlumberger Ltd (SLB.N: Quote, Profile, Research, Stock Buzz), Halliburton Co (HAL.N: Quote, Profile, Research, Stock Buzz) and BJ Services (BJS.N: Quote, Profile, Research, Stock Buzz) all provide hydrofracturing services to the companies. A spokesman for Schlumberger said it and the chemical companies that provide the fluids release lists of chemicals, acids and salts typically used in the process, but that the chemical companies will not give more details. "When it comes down to the different chemical makeup of these compounds, that's where it gets into proprietary third party information," the spokesman, Stephen Harris, said. Halliburton said 99 percent of its fluid was made up of sand and water, and the remaining chemicals complied with state and federal regulations. "We make a significant investment in developing effective fracturing fluid systems and we are careful to protect the fruits of the company's research and development efforts," Halliburton spokeswoman Cathy Mann said in an email. Louis Baldwin, chief financial officer of XTO Energy (XTO.N: Quote, Profile, Research, Stock Buzz), said the number of incidents of spills or leakage was "infinitesimally small" given the thousands of wells in which hydrofracturing had been used. "All Is Well"
EnhancedYield	well, call me a cynical old goat	#79	[-]
Member Posts: 131 (09/25/09 14:34:25) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	but if 99% sand and water, why not 100% sand and water? ...could be that if the proprietary chemicals were published they would be shown to be ineffective, and that would undercut any sort of allure/price premium any particular service company might demand. Fallen, fallen, fallen is Babylon the Great, space is getting bounded, time is getting late...
patgarrett666	Natural gas operator ordered to cease operations	#80	[-]
Member Posts: 11000 (09/25/09 15:59:55) Reply Quote More My Recent Posts Message Me Connection Blocking Invite Ignore User's Posts	Another black eye. A third spill? If I was still in the business I would have run off this crew by now. Pat Natural gas operator ordered to cease operations By Steve McConnell Wayne Independent Dimock Township, Pa. - A natural gas drilling company must halt a critical aspect of its operations after spilling nearly 8,000 gallons of a toxic mixture on three separate occasions in less than one week at a site in Dimock Township, Susquehanna County, according to an order handed down by the state Department of Environmental Protection on Friday. Texas-based Cabot Oil & Gas, who has extensive production operations in the rural community, can no longer use a critical process for reaping natural gas, called hydraulic fracturing, until the company complies with the state environmental regulator's (DEP) demands. The company, who also has a leasehold in Wayne County giving it the right to explore and drill for natural gas here, was charged with five environmental violations on Tuesday after it reported that a harmful fluid used in the fracturing process spilled two times into a wetland area and a local creek in the township. (see related article online and in the weekend edition of The Wayne Independent.) The company additionally had a repeat instance on Tuesday, of less severity to the environment, yet nonetheless included an unsafe, toxic chemical breach. "The department took this action because of our concern about Cabot's current (fracturing) process and to ensure that the environment in Susquehanna County is properly protected," said DEP Regional Director Robert Yowell in a statement. DEP has asked the company to update and ensure the accuracy of a pollution prevention and contingency plan within 14 days for all permitted natural gas well sites in Susquehanna County. The company must also conduct an engineering study of all equipment and work practices associated with hydraulic fracturing within 21 days. The study must further include a detailed evaluation and explanation of the causes of the spills. In addition, DEP issued an environmental violation notice regarding the third spill. DEP previously cited the company for the first two incidents. http://www.wayneindependent.com/news/x1699599035/Natural-gas-operator-ordered-to-cease-operations

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