Natural gas drilling continued to decline in 4Q2012, despite an uptick in exploratory gas drilling for the period, the American Petroleum Institute (API) said. “In the year-to-date comparison, gas well completions have decreased 26%” to 9,752 wells in 2012 from 13,128 wells in 2011, said API, which represents major oil and gas producers. At the same time, oil drilling rose in the period, with exploratory and development wells up 15% and 16% respectively from year-ago figures. “The oil and natural gas industry expanded oil drilling in 2012, thanks in large part to access on private and state lands,” said API statistics director Hazem Arafa. A year-to-date comparison of oil wells drilled yields a 25% increase in total well completions between 2011 and 2012 (26,213 to 32,652).

Despite producing less wastewater per unit of natural gas produced versus conventional wells, the enormity of growth in the Marcellus Shale has increased total wastewater generated in the region by about 570% since 2004, “overwhelming current wastewater disposal infrastructure capacity,” according to a study by Duke and Kent State universities. the shale play “is massive and the cumulative volume of wastewater generated in the region is growing dramatically,” according to the study, which was published in Water Resources Research. Hydraulically fractured (fracked) gas wells in Pennsylvania produce “significantly less wastewater per unit gas recovered (35%) compared to conventional natural gas wells,” said researchers Brian Lutz, Aurana Lewis and Martin Doyle. While the average Marcellus well generated six times more drilling waste than the average conventional well during the period studied, they also produced significantly more gas on average than their conventional counterparts. The study was based on statewide natural gas and associated wastewater production data for 2000-2011 obtained from the Pennsylvania Department of Environmental Protection’s Bureau of Oil and Gas Management. Waste records for 2007 were not available.

Freeport-McMoRan Copper & Gold Inc. expects to complete in March its $9 billion, excluding debt, acquisition of Plains Exploration & Production Co. and McMoRan Exploration Co., officials said (see NGI, Dec. 10, 2012). The acquisitions would reshape Freeport from its current 100% mining focus to about 75%. “And we’ll go from a situation where North America, the U.S., which currently represents about 30% of our business, goes to 50% of our business…Credit rating agencies consider this positive in terms of maintaining our investment grade credit ratings,” said CEO Richard Adkerson.

Colorado’s oil production last year passed the 40 million bbl mark for the first time in 50 years, while natural gas and coalbed methane (CBM) output were down, according to preliminary data from the Colorado Oil and Gas Conservation Commission (COGCC). Oil output reached 41.7 million bbl in mid-January, 39.1 million bbl in 2011. For natural gas, preliminary statistics put 2012 production in 2012 at 1.478 Tcf, well below 1.697 Tcf in 2011, and well below totals since 2008 that have been higher than 1.5 Tcf. State Geologic Survey records dating back to 1960 last showed Colorado oil production above 40 million bbl in 1962 when the annual total was 42.5 million bbl.

Gulfport Energy Corp. plans to have two Utica Shale test wells in production and connected to pipelines this spring. The company’s Clay 1-4H well, in Belmont County, OH, tested at an average sustained 12-hour rate of 5.9 MMcf/d, 747 b/d of condensate and 761 b/d of natural gas liquids (NGL). The Stutzman 1-14H well, in Harrison County, OH, tested at an average sustained four-hour rate of 21.0 MMcf/d and 945 b/d of NGL. The two wells were permitted last August, according to the Ohio Department of Natural Resources. Gulfport plans to spend the lion’s share of its capital spending this year, $322-336 million, in the Utica.

Seneca Resources Corp., exploration subsidiary of National Fuel Gas Co., said preliminary results indicate that six completed wells in Pennsylvania’s Marcellus Shale are among the most productive ever drilled in the play. The wells, drilled on a pad within its DCNR 100 tract in Lycoming County registered 24-hour peak production rates that collectively averaged 17.8 MMcf/d. The company expects to have 15 producing wells connected to the National Fuel’s Trout Run gathering system by the end of January, including the six wells. Seneca plans to complete another 16 wells in the DCNR tract in fiscal 2013, with about 25 more in 2014.

New York Gov. Andrew Cuomo has proposed slashing the Department of Environmental Conservation‘s (DEC) budget by more than one-sixth for the upcoming fiscal year, dashing hopes that the agency could hire additional drilling inspectors. Cuomo unveiled an executive budget totaling $136.5 billion for fiscal 2013-2014, beginning April 1, but the total budget is $142.6 billion with federal funding to aid in Superstorm Sandy recovery. The DEC would receive $897.8 million, or $187.4 million less than it received during the preceding fiscal year, a 17.3% decrease.

WPX Energy Inc. said its first horizontal test well in western Colorado’s Niobrara formation in the Piceance Basin has the potential of more than doubling its proved, probable and possible reserves. The Tulsa-based producer said initial production results from a well drilled in Garfield County hit a high of 16 MMcf/d and flowed at a pressure of 7,300 pounds per square inch. The well has since been choked back and has been producing at an average rate of 12 MMcf/d for about 30 days. WPX plans to drill at least two more horizontal wells targeting the Piceance in 2013, depending on when it receives necessary permits. The wells are to be drilled within a six-mile radius of the first test well.

EQT Corp. said horizontal drilling in 2012 in the Marcellus Shale helped achieve record sales volumes overall. Marcellus sales rose 85% from 2011. Overall production volumes were 258.5 Bcfe, a 33% increase from 2011. Of that total, 58% came from the Marcellus. Overall production volumes in 4Q2012 were 76.2 Bcfe up 44% year/year and 12% sequentially. Volumes are forecast to increase this yar to 340 Bcfe from 335 Bcfe, a 31% increase.

Continental Resources Inc. said its proved reserves have nearly doubled, driven by growth in the Bakken Shale and in south-central Oklahoma. Year-end proved reserves totaled 785 million boe — a year/year increase of 54% — and were now valued at about $13.3 billion net. Continental is the largest Bakken leaseholder with more than 1.1 million net acres. Proved reserves from the Bakken and in south-central Oklahoma totaled 564 and 63 million boe at the end of 2012.

Magnum Hunter Resources Corp. intends to drill at least four Utica Shale test wells in Ohio this year, and if results are similar to operators in the area, further development is planned. Subsidiary Triad Hunter has mineral rights on about 81,000 net acres, largely held by production. About 26,514 net acres are deemed to be in the Utica’s wet gas window. Triad recently drilled and cased two Marcellus wells on its Ormet acreage in Monroe County, OH, adjacent Utica potential.

The Environmental Protection Agency (EPA) has approved Omnitek Engineering Corp.’s application for diesel-to-natural gas conversion technology for Navistar’s heavy-duty DT466E and DT530E engines. The approval adds 1.5 million potential conversions to the marketplace, said Omnitek CEO Werner Funk. Omnitek’s website claims it can convert five to seven diesel engines a week for $7,000-12,000 per engine. The conversion technology has been used on more than 5,000 engines outside the United States since 2001. Funk said he expects to obtain approval from the EPA to use the technology on other diesel engine models.

Oilfield services operator Aztec Well Servicing has suspended plans to convert truck and drilling rig fleets to natural gas from diesel because New Mexico Gas Co.’s inability to service a proposed fueling station in Farmington, NM, it said. The utility said it can service the location, if it builds a pipe extension, which would cost up to $850,000. Aztec had proposed converting 121 trucks and 13 drilling rigs to run on compressed natural gas and develop a fueling facility.

A natural gas well in eastern Utah owned by Devon Energy Corp., which caught fire on Jan. 22, was expected to take “up to a week or longer to bring things back to normal conditions,” according to the Duchesne County Sheriff’s Office. The fire led to a precautionary evacuation of three homes north of Roosevelt, UT, prompted over concerns about the possible release of hydrogen sulfide gas. Crews working on a rig operated by Frontier Drilling had completed drilling a vertical well shaft at the site shortly before the apparent well blowout; no one was injured.

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