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West Virginia DEP Tells Two Companies to Cease Drilling

The West Virginia Department of Environmental Protection's (DEP) Office of Oil and Gas (OOG) has ordered Antero Resources Appalachian Corp. and Bronco Drilling Corp. to cease operations at an Antero well pad in Harrison County, WV, following a March 21 incident in which drill cuttings were washed into a nearby stream, OOG said.

OOG also issued five notices of violation to Denver-based Antero and one to Edmond, OK-based Bronco, a contracted drilling services company, following the March 21 incident at the O. Rice pad, located near Salem, WV.

Inspectors found evidence that drilling mud had flowed into Indian Run, according to OOG, which said there was no evidence of a resulting fish kill in the stream.

OOG said it has ordered Antero to cease operations at the well pad until it can demonstrate an understanding of the cause of the failure to contain materials and an ability to reasonably contain liquids at the site. Antero must also submit proposals for soil sampling and remediation to remove and dispose of any contaminated soil from the pad, for surface water sampling and for testing and monitoring all water wells within a 2,000-foot radius of the pad (or methods for groundwater testing and monitoring if no such water wells exist).

OOG initially ordered Bronco to cease its operations on all well pads in the state until Bronco developed a spill prevention plan for all of its current and future activities in the state. Last Thursday DEP and Bronco reached an agreement "that abated the company's violations and lifted the cease order," DEP said. Bronco provided OOG a spill prevention plan, made corrections at its active drilling sites and agreed to pay a $15,000 civil administrative penalty.

While OOG has cleared Bronco to resume operations at its other facilities in the state, the O. Rice well pad remains idle because of the cease operation order in place with Antero.

Following its recent acquisition of Appalachian natural gas producer Bluestone Energy Partners, privately held Antero Resources controls nearly 168,000 net acres in the Marcellus Shale and has 80 MMcf/d of gross operated production (56 MMcf/d net) in the southwestern part of the play (see Shale Daily, Dec. 3, 2010). Almost all (96%) of the former Bluestone leasehold is in West Virginia, with the remaining land in Pennsylvania.

Last month Antero said its $519 million preliminary capital budget for 2011 includes $452 million for drilling and completion, $42 million for the construction of gathering pipelines and facilities and $25 million for leasehold acquisitions. Approximately 71% of the budget is allocated to the Marcellus, with 15% allocated to the Woodford Shale and Fayetteville Shale and 14% allocated to the Piceance Basin. Antero plans to operate five drilling rigs in the Marcellus this year, with one drilling rig each planned in the Woodford and Piceance.

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