Barnett Shale

The Barnett Shale's oil play

Even as drilling activity has plummeted in the Barnett Shale from 2008's highs, rigs continue to work in the oil window of the big North Texas field. EOG Resources started it, but more companies are looking for oil and valuable condensate in an area that made its name in natural gas. The Star-Telegram takes a look at the play in Montague, Wise and other counties in the northwest reaches of the field. The story is here.

-- Jim Fuquay

Chesapeake pays $1.6 million more in Marcellus water contamination case

In a methane contamination case that has already drawn a $900,000 fine from Pennsylvania regulators, Chesapeake Energy is paying $1.6 million to three landowners in Bradford County to settle claims the producer leaked methane into the households' drinking water. The company's is buying the properties, which are on county tax rolls for a little over $100,000 altogether, and making other payments. The landowners sued in 2011 and the case was in arbitration when Chesapeake settled. Regulators said poor well casings allowed natural gas to migrate to the landowners' water wells. Chesapeake says it still doesn't believe there is permanent damage "that would prevent a future sale, enabling Chesapeake Appalachia to recoup a significant portion of the settlement."

Platt's has a report here.

 

Chesapeake Energy gains new chairman, directors

The new chairman at Chesapeake Energy is Archie W. Dunham, former chairman of ConocoPhillips and former CEO of Conoco. He is the Oklahoma City-based producer's second chairman in its 23-year history, filling the post opened when co-founder and CEO Aubrey McClendon lost the title in the furor surrounding his personal finances. The company says Dunham has no previous relationship with Chesapeake.

Also in are four new directors on the nine-seat board. They are: Bob Alexander, former CEO of Alexander Energy Corp.; Brad Martin, former chairman and CEO of Saks Inc.; Fred Poses, CEO of Ascend Performance Materials; and Vince Intrieri, an associate of investor Carl Icahn. Alexander, Martin and Poses were proposed by Southeastern Asset Management, Chesapeake's largest shareholder and an open advocate for change at the company.

The Oklahoman has a report here.

-- Jim Fuquay

 

Group calls industry emissions study "garbage"

Physicians Scientists & Engineers for Healthy Energy, a group that includes two Cornell University professors who are frequent critics of oil and gas development, says an industry study contesting the EPA's estimates of emissions related to natural gas production is "garbage." The report by the American Petroleum Institute and American Natural Gas Alliance is "fatally flawed," and a separate study actually shows emissions to be higher than those calculated by the Environmental Protection Agency, PSE said.

The group's release is here.

-- Jim Fuquay

Chesapeake cuts 70 workers in Barnett Shale

Chesapeake Energy said today it will cut 70 employees in the Barnett Shale, or about 8 percent of its workforce in the field, as the natural gas producer reduces its activity here. It said it will employ about 700 in the Barnett field after those cuts are made. It has said previously that its peak employment was about 1,200.

In a prepared release, the Oklahoma City-based company, which has large offices in Fort Worth and Cleburne, said positions are being eliminated “in support departments such as public affairs, marketing communications, community relations, legal, land, land administration, administrative services and information technology. These are the departments most directly impacted by reduced leasing and drilling activity.” Chesapeake, the second-largest producer in the Barnett Shale, on May 2 said it would operate just two drilling rigs in the Barnett Shale, down from a peak of 44 in 2008 and 12 at the start of 2012. At the same time, it said it slashed the number of independent land agents it used for leasing from about 350 to 139.

“Chesapeake will continue to have a significant presence in the Barnett Shale,” said Julie Wilson, vice president of urban development. She said affected workers “will receive generous severance packages” and outplacement assistance.

-- Jim Fuquay

Fracturing, other oilfield services see overcapacity

The Houston Chronicle has a comprehensive look at the effect of softer petroleum prices and rising competition on oilfield services companies, especially in the category of pressure pumping, which includes hydraulic fracturing. The newspaper says the price of a fracturing job is down about 20 percent from its peak. It quotes Marc Rowland, CEO of FTS International, which has a big Fort Worth manufacturing operation, as saying the company has suspending all plans to add capacity in pressure pumping. The story is here.

-- Jim Fuquay

Exxon won't pursue Polish shale projects

Exxon Mobil won't proceed with shale gas exploration in Poland because test wells are uneconomic, a Polish newspaper reported over the weekend. The paper quoted a spokesman in Poland for Irving-based Exxon, who said two wells tested poorly. Reuters has a report here.

-- Jim Fuquay

 

"Dallas" does fracturing ... sort of

In case you missed Wednesday's premiere of TNT's revival of the old TV series Dallas, ProPublica's Abraham Lustgarten wraps up the story line as it pertains to environmental issues. No, hydraulic fracturing isn't directly named, he notes, but there's a stand-in. Lustgarten's report is here.

-- Jim Fuquay

Solar energy could help Texas peak power demand, study says

Brattle Group, which just completed a study of the Texas electricity market for the state's largest grid operator, says it will release a new study next week that shows the state would benefit from more solar power. The new report is funded by the Solar Energy Industries Association and the Energy Foundation, which promotes energy efficiency and renewable energy. It looks at "how much electricity prices for Texas consumers would be reduced by adding solar capacity to the Texas electricity market." It's set to be released June 19. According to a news release announcing the report, it "shows the total potential cost savings for electricity customers through reduced prices from additional electricity generation, lower fuel costs from utilizing solar instead of additional fossil fuel electricity generation, and the lower costs for operation and maintenance that come with solar energy." Brattle's earlier study for the Electric Reliability Council of Texas recommended, among other things, allowing peak power prices to rise to encourage more generation.

-- Jim Fuquay

Barnett Shale rigs continue migration to oil

Continuing a move to oil and liquids-bearing areas of the Barnett Shale, Wise County was the most active with 10 rigs. It was followed by Montague with nine, Jack with four and Stephens with three. Those counties have significant oil production. Tarrant County, the leader for years until recently, had eight. Total rigs in the field were down two, to 42.

Across the nation, active drilling rigs fell by 13 this week to 1,971, according to Baker Hughes Inc., which reported Friday that 1,405 rigs were exploring for oil and 562 were looking for gas. Four were listed as miscellaneous. A year ago this week, Baker Hughes reported 1,860 rigs. In the Barnett Shale active rigs declined by two to 42. 
— Jim Fuquay