As Kentucky prepares for what could be a sharp increase in unconventional oil and gas exploration, with interest growing in the Rogersville Shale, the state has passed new legislation, is working to update its regulations and is installing a network of seismic and groundwater monitoring equipment.
Speculation over the viability of the Rogersville as the Appalachian Basin's next big horizon has been growing since at least 2013. A part of a deep, narrow subbasin called the Rome Trough that contains other source rocks extending northeastward into Pennsylvania and southern New York, the Rogersville is slowly gaining more attention in both eastern Kentucky and southwestern West Virginia.
In Kentucky, a subsidiary of Cimarex Energy Co., Bruin Exploration LLC, was issued a vertical permit in March for the Rogersville in Lawrence County , according to the Kentucky Department of Natural Resources' Division of Oil and Gas. In April, Horizontal Technology Energy Co. LLC -- an affiliate of Marcellus Shale heavyweight EQT Corp. -- was also issued a horizontal permit for the Rogersville in nearby Johnson County, according to state records.
Thus far, said Kentucky Energy and Environment Cabinet spokesman Dick Brown, those are the only two permits that have been issued to test the Rogersville in the state. But beginning in about 2013, local governments across the state reported that oil and gas companies started to lease mineral rights for the formation.
West Virginia Oil and Natural Gas Association Executive Director Corky DeMarco said Cabot Oil and Gas Corp. has drilled a Rogersville test well in Putnam County, near the state's border with Kentucky. The company has also been actively leasing land in the area, he added.
"It's the southwestern part of the state, [operators] think it might go north of Kanawha County, and it could be as far north as Parkersburg (in Wood County)," DeMarco said of the Rogersville's position in the state. "Certainly, the thrust of it now -- it's Putnam, Jackson, Mason, Wayne and Lincoln counties."
DeMarco said early indications of the Rogersville suggest it could be a natural gas play in West Virginia and an oil play in Kentucky. Its viability in West Virginia would find operators shifting from their core areas of Marcellus activity in the northern part of the state. But a number of large land companies, smaller oil and gas companies, coal companies and larger independents such as EQT Corp., Chesapeake Energy Corp. Consol Energy Inc. and Cabot are already thought to hold significant Rogersville acreage in southwest West Virginia, DeMarco said.
At a depth of about 10,000 feet or more in both states, DeMarco said drill bits have likely gone through the Rogersville on their way to the Trenton-Black River formation in West Virginia. But we "haven't targeted the Rogersville as a primary formation until recently."
In Kentucky, a state with a long history of natural resource extraction, preparations are being made for a possible boom, especially if oil and gas prices rebound and the formation yields adequate hydrocarbon volumes. In March, Kentucky Gov. Steve Beshear signed SB 186 into law, which contains requirements for horizontal hydraulic fracturing (fracking). The Energy and Environment Cabinet has also announced a series of public meetings that begin next month for stakeholders to weigh-in on oil and gas development in the state.
Those comments would be submitted to the state's oil and gas work group, which was formed by Energy and Environment Cabinet Secretary Len Peters in 2014 to update the state's oil and gas regulations. Some of the group's work prompted the statutory changes that were passed in SB 186, Brown said.
Meanwhile, The Kentucky Geological Survey (KGS) has started installing a network of 15 seismic monitors to track background level natural earthquakes that can be used as a benchmark if a quake is detected near an unconventional well or injection well. The UK Department of Earth and Environmental Sciences is collaborating with KGS and instrument manufacturer Nanometrics Inc. has agreed to match the number of stations that KGS purchased. Seismologist and project leader Seth Carpenter said he expects another industry partner to join, which would likely increase the size of the network.
KGS is also at work on evaluating existing water wells in different parts of the state to establish baselines. The research projects are in response to anticipated development in the Rogersville, KGS said.