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WPX Energy: Pennsylvania Water Wells Not Fouled by Drilling

WPX Energy Inc. said it has determined through isotopic testing that four contaminated drinking water wells in Susquehanna County, PA, were fouled by naturally occurring methane and not by Marcellus Shale drilling.

Tulsa-based WPX spokeswoman Susan Oliver told NGI's Shale Daily that the test results from three residences in the Franklin Forks neighborhood of Franklin Township have been submitted to the Pennsylvania Department of Environmental Protection (DEP), which has been conducting an investigation since December.

"The isotopic testing indicates that the gas [in the water wells] is shallow methane with the same chemical footprint as the shallow methane in the Salt Springs State Park [PA] area," Oliver said Wednesday. "It's been in that entire area of Susquehanna County ever since the Indians walked the land."

Three families in Franklin Forks reported problems with their drinking water to the DEP last December, and the agency approached them shortly afterward, Oliver said. She said WPX's nearest well to the area was more than 4,000 feet away, and that the producer's second-closest well was more than a mile and a half away.

"The DEP said they reached out to us because we were the closest operator," Oliver said, adding that subsequent indoor air screenings -- at the three homes and also at a nearby business, the Heavenly Angels Convenience Store & Deli -- were conducted by the company in December and March but found nothing amiss. WPX vented all four wells and has voluntarily provided water to the three residences.

"We have no plans to discontinue [the water deliveries] or to change anything about that right now," Oliver said. "We have been waiting since March for permission to do a mechanical evaluation of a well that is spraying water. We did a very simple test and we were able to recreate a so-called 'water eruption.' It clearly indicates to us that there is a mechanical issue somewhere in the integrity of that well that needs to be evaluated."

Asked if the mechanical test was imperative, Oliver said, "If you're going to do a thorough investigation and a scientific evaluation of what's happening in that area, you have to take a look at everything."

DEP spokeswoman Colleen Connolly said the agency has received WPX's test results, but she declined to speculate about when the ongoing investigation may be completed. According to the DEP's Office of Oil and Gas Management (OGM), WPX was fined five times in 2011 for natural gas well violations in Franklin Township. The violations included defective cement casings, inadequate erosion, sediment control and pollution prevention plans, inadequate wastewater pits and tanks, and failure to take all necessary measures to prevent a spill.

Franklin Township currently has 38 active wells, all of which are targeting natural gas in the Marcellus Shale; three are vertical wells, according to the OGM. WPX Energy Appalachia LLC operates 37 of the 38 wells, and while Cabot Oil & Gas Corp. operates a vertical well. WPX was spun off from Williams at the end of 2011.

In the first quarter WPX reported a net loss of $40 million, versus a net loss of $1 million in 1Q2011. Per-unit lease operating expenses were 50 cents/Mcfe and gathering, processing and transportation charges were $1.09/Mcfe in the latest quarter, compared with year-ago expenses of 52 cents/Mcfe and $1.02/Mcfe, respectively. Production in the quarter totaled 1.13 Bcf/d, up 8% from 1Q2011 (1.05 Bcf/d) and 4% from 4Q2011 (1.09 Bcf/d). Marcellus Shale production rose a whopping 489% year/year to 53 MMcf/d from 9 MMcf/d, however, high line pressures associated with new gathering capacity were curtailing further output, management noted.

"In the Marcellus Shale, [we are] high-grading [our] rig fleet as it is in the Bakken to continue to reduce drilling times," WPX management said in its first quarter report. "Incoming rigs for 2012 are specifically designed for conditions in the Appalachia Basin. During the first quarter, WPX completed 11 wells (nine net) in the Marcellus and had as many as four rigs operating. Only one rig is deployed now, with plans for delivery of a second rig in May that is fit-for-purpose. Drilling in 2012 is focused on Susquehanna County, where the company plans to average three rigs this year." The company also cut its production guidance for natural gas to 1.09 Bcf/d, down from an earlier target of 1.16 Bcf/d.

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