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EnCana Makes Debut in Marcellus Formation

EnCana Oil and Gas (USA), the Denver-based subsidiary of one of the leading natural gas producers in North America, has partnered with Denver-based producer WhitMar Exploration to make its debut in the Marcellus Shale play in Pennsylvania.

The two producers have signed an exploratory agreement to jointly develop 25,000 acres in Columbia and Luzerne counties in western Pennsylvania. WhitMar, which leased the acreage, has been in the Marcellus for about one year, but it needed a company with greater resources to help it develop the leases, said EnCana spokesman Doug Hock.

At the same time, "we [EnCana] were looking for the right partner and right venture" in the Marcellus formation, he said. By some estimates EnCana is late in coming to the Marcellus. That's because "we have been very involved in Haynesville for the last 18 months," Hock said.

The agreement calls for EnCana to develop only two exploratory wells in the Marcellus formation. Further activity will depend on the outcome of its initial exploratory efforts, he said. EnCana has a 75% interest in the 25,000-acre leasehold and will be the operator.

The Marcellus formation extends 575 miles and includes portions of New York, Pennsylvania, Ohio and West Virginia, as well as small areas in Maryland, Kentucky, Tennessee and Virginia. It has been estimated that it holds 500 Tcf of natural gas, of which 50 Tcf could be realistically recovered.

WhitMar has partnered with a number of companies to develop acreage in the Marcellus play. In June 2008 it formed a leasehold acquisition and drilling joint venture with XTO Energy Inc. of Fort Worth, TX, to drill and develop approximately 25,000 acres in Lycoming County, PA.

Earlier in 2008 it partnered with Carrizo Oil and Gas of Houston to drill and develop about 30,000 acres leased by WhitMar in certain counties in upstate New York and Northeast Pennsylvania. The initial drilling commitment was for six months.

And in May 2007 WhitMar partnered with Denver-based Anschutz Exploration Corp. to drill and develop about 10,000 acres in Chemung County, NY.

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