Calling it the largest reserve discovery in the AppalachianBasin, Columbia Natural Resources (CNR), a Columbia Energy Groupsubsidiary, said it found reserves with estimated production of 50MMcf/d while drilling deep into a sub-basin in Roane County, WV.The exploratory test well was drilled to a depth of 10,300 feet inthe Trenton-Black River Formation on the Vineyard Ridge prospect.

“The well demonstrated a significant flow of natural gas as wedrilled into the top of the formation; certainly it was far morethan anything we expected based on past experience,” said W. HenryHarmon, CNR’s CEO.

The preliminary finding dwarfs the average estimate forproduction from an Appalachian Basin reserve, which is usuallybetween .5 MMcf/d and .75 MMcf/d, Larry Malone, a CNR spokesmansaid.

The company is scheduled to start drilling an offset well thisfall, which will confirm the initial findings and indicate if thereare any more reserves in the area. Production from the Roane Countywell is scheduled to begin in July.

Columbia plans to connect the well to a natural gas gatheringfacility for initial production while it builds a pipeline thatwill feed directly into Columbia Gas Transmission. The site isjust 20 miles from Columbia’s office in Charleston, WV.

CNR is one of the largest players in the Appalachian Basin. “Itis our core production area,” Malone said. The company owns 7,700wells and 2.6 million net acres in the basin with a total reservebase of 840 Bcf.

Meanwhile, Columbia Energy Group has asked the Securities andExchange Commission to allow it to increase its investment in oiland natural gas E&P properties in Canada from $5 million to $55million. Columbia, a registered holding company under the PublicUtility Holding Company Act of 1935, must get SEC approval forforeign ventures. The company said its Columbia Natural ResourcesCanada Ltd. operates properties in areas similar to its AppalachianBasin holdings in the U.S. It plans to spend $50 million over threeyears developing additional properties in the same area.

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