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Effective Oct. 15 (Monday), producers have to notify the U.S. Environmental Protection Agency (EPA) by e-mail two days in advance of their plans to hydraulically fracture (frack) natural gas wells. An e-mail address system has been set up to allow operators to notify the the agency, said Khary Cauthen, senior director of federal relations with the American Petroleum Institute. Producers would send e-mails to EPA offices in the regions where they are operating. The EPA recently "made known" to producers a list of the e-mail addresses, according to API. "Having to notify the EPA two days before a specific operation we felt...makes sense. In other iterations of this rule, it was a longer time period of notification that did not make sense because sometimes locations or weather or what may have you will change exactly what the operation is. Two days before is appropriate," Cauthen said. The notification requirement was part of the new source performance standards for fracked wells, which the EPA finalized in August (see NGI, Aug. 27). Both the API and the Independent Petroleum Association of America protested the EPA final standards, which are aimed at restricting volatile organic compounds and sulfur dioxide emissions from onshore natural gas operations, including fracked wells.

Boosted by activity in the Marcellus Shale and Mississippian Lime, Range Resources Inc. said it beat its 3Q2012 forecast for natural gas and natural gas liquids (NGL) production, with output up 47% year/year (y/y) and 10% sequentially. According to the preliminary results, natural gas accounted for more than three-quarters (79%) of the total three-month net output at 623.3 MMcf/d, which is 52% higher than in 3Q2011. NGLs accounted for 15% of the quarterly production at 20,040 b/d, while oil claimed 6%, or 7,748 b/d. The independent previously had said its 3Q2012 production would average 618-628 MMcf/d of gas, 18,600 b/d of NGLs, and 7,600-7,800 b/d of oil. NGL output is about 30% higher than a year ago, and oil is up 36% y/y and 10% higher than in 2Q2012.

Gulfport Energy Corp. reportedly has the best producing well to date in the Utica Shale, based on initial production data. The Shugert 1-1H well in Belmont County, OH, recently tested for 32 hours at a maximum rate of 20 MMcf/d of natural gas, 144 b/d of condensate and 2,002 b/d of natural gas liquids. The well is expected to begin flowing to sales by early December. The Shugert well tops the No. 1 well drilled in the Utica to date, which also was drilled by Gulfport, the Wagner 1-28H in Harrison County, which was brought online in August after testing at a gross peak of 17.1 MMcf/d and 432 b/d of condensate (see NGI, Aug. 27). "Based upon composition analysis, the gas being produced is 1,204 Btu-rich gas," said Gulfport. "Assuming full ethane recovery, the composition...is expected to produce an additional 100 bbl of NGL and result in a natural gas shrink of 17%. In ethane rejection mode, the composition is expected to yield 40 bbl of NGLs per MMcf...and result in a natural gas shrink of 9%."

The Pennsylvania Department of Environmental Protection (DEP) approved an air quality plan to construct the first natural gas-fired power plant to run, at least in part, by natural gas harvested from the Marcellus Shale. Moxie Liberty LLC, a subsidiary of Moxie Energy LLC, plans to build a 936 MW power plant in Asylum Township in Bradford County. Vienna, VA-based Moxie said the project would take about 30 months to complete and employ an average of 200 skilled and nonskilled workers, with a peak workforce of about 500. The $800 million-plus facility is expected to come online in mid-2015 and create 25-35 permanent jobs. The DEP said it was reviewing an air quality plan application by a sister company, Moxie Patriot LLC, for a similar facility to be built in Clinton Township in Lycoming County. Meanwhile, LS Power Group reportedly plans to build a $750 million, 900 MW power plant in Lawrence County, with plans to bring it online by 2017.

Carrizo Oil & Gas Inc. is close to completing a vertical test well in New York's Marcellus Shale. According to state permit data, Carrizo (Marcellus) WV LLC has drilled the Wetterling #1 well in Tioga County, about three miles northeast of the Town of Owego. Richard Hunter, Carrizo vice president of investor relations, said the well is being drilled to a depth of 5,000 feet and will target only the Marcellus; the Utica Shale is below the formation. Carrizo, with joint venture partner Avista Capital Partners, owns a 50% interest in 16,000 net acres in New York in Broome, Chemung and Tioga counties, all of which have been mentioned as potential development counties in the state by Gov. Andrew Cuomo (see NGI, June 18).

A year-long study has concluded that hydraulic fracturing (fracking) in an urban oilfield in the Los Angeles area will not harm the environment. In a 206-page report, environmental consulting firm Cardno Entrix concluded that fracking in the 1,200-acre Inglewood Oil Field would not harm surrounding residential areas, including Baldwin Hills, Culver City and Inglewood, CA. Plains Exploration and Production Co. (PXP), which owns and operates the oilfield, paid for the study as part of a settlement agreement with Culver City and several civic and environmental groups. The results of the study were also reviewed by two undisclosed environmental consulting firms, as required by Los Angeles County. The oilfield was mostly dormant until 2003 when 3-D seismic drilling found shale oil potential; PXP has proposed drilling 50 new wells a year in the play.

Marathon Petroleum Corp. agreed to pay $598 million plus inventories estimated at $1.2 billion for BP plc's 451,000 b/d Texas City, TX, refinery, three instrastate natural gas liquids pipelines originating at the refinery, an allocation of BP's Colonial Pipeline Co. shipper history, four terminals, retail marketing contract assignments for about 1,200 branded sites and a 1,040 MW cogeneration facility. The agreement contains an earnout provision under which Marathon could pay up to an additional $700 million over six years, subject to certain conditions. The acquisition is expected to be funded with cash on hand and close early in 2013. The deal continues BP's plan to sell assets to shore up its share price and help fund a $20 billion trust fund set up following the April 2010 Macondo well blowout in the Gulf of Mexico (GOM) (see NGI, Oct. 31, 2011). Last month Plains Exploration & Production Co. said it would pay BP $5.55 billion for deepwater GOM oil and gas properties (see NGI, Sept. 17).

Plains Exploration & Production Co. (PXP) has reached an agreement to sell to the Trust for Public Land natural gas leases on 58,000 acres in the Hoback Basin of the Wyoming Range. The $8.75 million sale effectively ends the company's plans to drill 136 gas wells. Wyoming's Range Legacy Act prohibits oil and gas development on 1.2 million acres of the Wyoming Range paralleling the state's western boundary with Idaho. Nearly 85% of the acreage involved in the PXP leases lies within the area protected by the law.

A Chesapeake Energy Corp. subsidiary has been fined $600,000 and placed on probation for two years after pleading guilty in federal court to violating the Clean Water Act (CWA) in order to build a roadway to a natural gas drilling site in northern West Virginia. Chesapeake Appalachia LLC pleaded guilty to discharging 60 tons of crushed stone and gravel into Blake Fork in Wetzel County at least three different times in December 2008. The company then spread the material in the stream to create a roadway to improve access to a drilling site. Chesapeake agreed to pay a $200,000 fine for each of the three convictions and serve court-supervised probation for two years. Separate violations committed by Chesapeake in conjunction with impoundments built in Marshall and Wetzel counties are to be addressed by civil penalties and not through criminal charges, the U.S. Attorney's office stated.

CNG In A Box, a project to provide compressed natural gas (CNG) refueling options for large- and small-scale retailers, has been unveiled by GE and a Chesapeake Energy Corp. affiliate, Peake Fuel Solutions. GE and Chesapeake in March launched a multi-year, three-part collaboration to rev up demand to use natural gas as a transportation fuel (see NGI, March 12). CNG In A Box, the first venture, compresses natural gas from a pipeline into CNG on-site at a traditional automotive fueling station or industrial location. CNG-powered vehicles then may refill their tanks using a dispenser with the "same look and feel" of a traditional diesel or gasoline dispenser. GE this fall plans to have more than 250 systems available for natural gas vehicle infrastructure.

A group of landowners has filed an amended lawsuit in U.S. District Court for the Eastern District of Arkansas, seeking class action status for their case against Chesapeake Energy Corp., Southwestern Energy Co. and XTO Energy Inc., alleging the companies are illegally operating six wastewater injection wells in the Fayetteville Shale (Hill et al v. Southwestern Energy Co. (No. 4:12-CV-00500-DPM). At issue are six Class II injection wells in Conway, Faulkner and Independence counties. The original lawsuit was filed on Aug. 10 by four landowners in Faulkner County against Southwestern, which had filed a motion to dismiss in September. The amended complaint seeks to add another 11 landowners as plaintiffs. The petitioners are also seeking a jury trial, $2 million in compensatory damages per plaintiff, and $15 million in punitive damages per plaintiff.

Louisiana Commissioner of Conservation James Welsh ordered Texas Brine LLC to abate the safety and environmental threats from its failed brine cavern on the west side of the Napoleonville Salt Dome in Assumption Parish (see NGI, Sept. 24). Welsh said based on "fingerprint" analysis and other data, the source of crude oil and natural gas observed at the surface in the Bayou Corne area appears to be from a naturally occurring formation, and evidence indicates the failure of the cavern's sidewall provided a pathway to the aquifer and the surface for oil and natural gas previously confined thousands of feet below. Louisiana Oil and Gas Association President Don Briggs noted that "gas storage facilities exist all across the Lower 48 states of the U.S. According to the U.S. Energy Information Administration, there are currently close to 400 underground storage facilities. As the 20-plus shale plays in the U.S. continue producing a massive supply of natural gas, the need for more storage is obvious."

Privately held Chama Technologaes agreed to pay $15 million in cash and 658,289 shares of its stock for a controlling interest in High Plains Gas Inc. (HPG). Two years ago an HPG subsidiary acquired the former Marathon Oil Corp. north and south fairway assets in Wyoming's Powder River Basin, which include 1,614 coalbed methane wells with associated flow lines and more than 155,000 net operated acres (see NGI, Nov. 29, 2010). HPG "has experienced difficulty in maintaining profitability due, in large part, to the decline curve typical of coalbed methane wells," said Chama, which owns the patent on a device that it says "solves this problem and will bring profitability back to these wells." The methane "farming" technology brings methane gas molecules to the surface "by way of diffusion and osmosis," according to the company. Last month Chama completed a merger with RWM Resources Inc. that gave the company rights to 450 natural gas wells and several oil wells.

Six weeks after Mexico's Petroleos Mexicanos (Pemex) reported its first deepwater discovery in the Gulf of Mexico, the producer said it has struck another big gusher nearby. In late August Pemex reported the Trion 1 discovery in the Perdido Fold Belt near the Mexico-U.S. maritime boundary that may contain up to 400 million bbl of reserves (see NGI, Sept. 3). However, the latest well, aptly dubbed Supremus 1, is a worthy rival, said President Felipe Calderon. Supremus is offshore the Mexican state of Tamaulipas in 9,513 feet of water. The well was drilled 3,609 feet below the seafloor. At 12,000-plus feet deep, Supremus would be the eighth-deepest well in the world, according to Calderon. Trion was drilled in 8,250 feet of water.

A research team led by the University of Texas at Austin is collaborating on a major field study to measure methane emissions at onshore natural gas well sites, about which only a handful of empirical data exist. Anadarko Petroleum Corp., BG Group plc, Chevron Corp., Encana Oil & Gas (USA) Inc., Pioneer Natural Resources Co., Royal Dutch Shell plc, Southwestern Energy Co., Talisman Energy USA and ExxonMobil Corp. subsidiary XTO Energy Inc. agreed to provide the researchers access to production facilities in several key unconventional plays, including the Barnett, Eagle Ford, Fayetteville, Haynesville and Marcellus Shales, as well as the Denver-Julesburg Basin. The study, set to be completed in January, is to obtain "scientifically rigorous, representative data from multiple producing basins." The Environmental Defense Fund also is participating, as well as environmental testing firms URS and Aerodyne Research.

Cheniere Energy Inc.'s Sabine Pass Liquefaction LLC and Sabine Pass LNG LP have asked the Federal Energy Regulatory Commission for authorization to add facilities to their liquefaction and export project in Cameron Parish, LA, and to expedite construction of the second stage (the third and fourth liquefaction trains) [CP11-72-000]. The companies asked for approval of the changes by February to make up for project delays, as well as the project's construction contract with Bechtel Oil, Gas and Chemicals Inc.

CBI has been awarded contracts by Occidental Chemical Corp. (OxyChem) for the technology license, basic engineering and front end engineering and design services for a proposed ethane cracker with capacity of 1.2 billion pounds per year of ethylene. OxyChem and Mexico's Mexichem earlier this year signed an agreement to evaluate a joint venture ethane cracker to be built at Occidental's existing site in Ingleside, TX. The scope of CBI's work includes the basic engineering for the ethylene technology and five cracking heaters from CB&I's Lummus Technology business sector. Feedstock for the proposed cracker is anticipated to be ethane derived from domestic shale gas. A final investment decision on the project is not expected for 12-18 months.

Calgary-based Lone Pine Resources Inc. has signed two separate agreements with undisclosed private oil and gas companies to sell some of its noncore assets in the Kaybob area of the Deep Basin of Canada for C$19 million, subject to closing adjustments. Field estimates show the assets have a current net sales volume of approximately 3.4 MMcfe/d (82% natural gas) and total net proved reserves of 11.1 Bcfe as of Dec. 31. The two transactions each have an effective date of Aug. 1. The first transaction closed on Sept. 25 and the second is scheduled to be completed in mid-October. The proceeds would be used to reduce debt.

Pennsylvania state legislators Rep. Robert Hagan (D-Youngstown) and Sen. Michael Skindell (D-Lakewood) have introduced companion bills -- HB 596 and SB 379 in the Ohio General Assembly to reverse a gag order that the lawmakers say prevents medical personnel from doing their jobs as it relates to providing chemical information about hydraulic fracture (frack) fluids. The legislation would also require operators to report all chemicals brought to a well site. Other changes including revising the requirements for oil and gas permit applications, oil and gas well completion records, the designation of trade secret protection for fracking chemicals.

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