With the entire oil and gas industry under increased scrutiny because of the oil spill in the Gulf of Mexico, regulators in Pennsylvania and West Virginia last week were quick to shut down the drilling operations of some companies after a pair of unrelated accidents at two wells in the Marcellus Shale.

Pennsylvania’s Department of Environmental Protection (DEP) last Monday ordered EOG Resources Inc. to suspend all of its natural gas well drilling activities in the state following a June 4 blowout at a company well in Clearfield County, PA. The order prohibited EOG from drilling activities for up to seven days, from engaging in hydraulic fracturing operations for up to 14 days and from completing or initiating post-fracing operations for 30 days in any wells in the state, but none of the activities are to resume until DEP has completed a comprehensive investigation of the incident and EOG has implemented any required changes, according to DEP Secretary John Hanger.

“DEP staff, along with an independent expert, will conduct a detailed investigation of not just the incident that occurred last week in Clearfield County, but of EOG Resources’ drilling operations as a whole here in Pennsylvania,” said Hanger. “The Clearfield County incident presented a serious threat to life and property. We are working with the company to review its Pennsylvania drilling operations fully from beginning to end to ensure an incident of this nature does not happen again.”

On Friday DEP said EOG could resume work at two wells that had been determined to have no environmental or operational violations. The blown-out well, Punxsutawney Hunt Club #36H, which is located in an unpopulated area about 11 miles from Penfield, PA, remained out of service. The two wells allowed to resume operations are also at Punxsutawney Hunt Club.

The well “experienced a control issue” at about 8 a.m. June 3, according to EOG. A service rig was in the final stages of completing the well when the blowout occurred. The well, which had produced brine water and natural gas, was shut in and secured shortly after noon June 4, the Houston-based company said. Natural gas and fracing fluid shot approximately 75 feet high and flowed from the well for approximately 16 hours. Approximately 35,000 gallons of drilling wastewater were released during the incident, Hanger said.

There were no injuries, no fire and no significant impact to the environment as a result of the incident, according to EOG, which said containment trenches and sump pumps captured the majority of the fluids that flowed from the well during the incident.

A preliminary DEP investigation determined that a blowout preventer (BOP) on the well failed, but the agency does not know if that failure was the main cause of the incident. EOG said it appears that the seal integrity between the pipe rams of the BOP and the tubing was compromised, allowing pressurized fluids and some natural gas to flow.

EOG, which operates approximately 265 active wells in Pennsylvania, 117 of them in the Marcellus Shale formation, has been fully cooperative, according to DEP. EOG said it does not expect the suspension of activity in Pennsylvania will impact its previously issued 13% total company production growth target for 2010. Current EOG production in the Pennsylvania Marcellus Shale is approximately 11 MMcf/d and accounts for less than 1% of the company’s total daily production volumes.

DEP on Thursday ordered C.C. Forbes, a contractor that had provided post-hydraulic fracturing services at the EOG well, to suspend all post-hydraulic fracturing activities on Marcellus Shale wells in the state as DEP continues its investigation of the blowout. Washington, PA-based C.C. Forbes, a division of Alice, TX-based Forbes Energy Services, said it voluntarily idled its two workover rigs in the Marcellus on June 4, five days prior to receiving the DEP order, and has hired an independent third-party consulting firm to investigate the incident.

In an unrelated incident, seven drilling company employees were taken to a hospital after an explosion June 7 at an AB Resources-owned and operated well near Moundsville, WV, about 50 miles south of Pittsburgh. The West Virginia Department of Environmental Protection (WVDEP) quickly ordered AB Resources to halt all of its operations in the state until the cause of the explosion can be determined.

The explosion occurred when a rig apparently hit an inactive coal mine shaft, igniting methane gas that had collected there, according to WVDEP.

WVDEP issued two notices of violation to AB Resources for violations of the conditions of its permit. The notices cited AB Resources, which is the permit holder for the site where the incident occurred, for failing to set casing at the permitted depth and for inaccurately reporting the coal seam depth in the permit application.

The cease operations order requires the company to review the reported coal seam and casing depths for all drilled and proposed wells; take all steps necessary to comply with West Virginia Code requirements for a person trained in blowout prevention to be present at all times during drilling rig operation; and demonstrate knowledge and an understanding of the events that led up to and the cause of the June 7 incident.

WVDEP said it will review all of AB Resources 19 active permits for operations in the state. The department’s Office of Oil and Gas has also begun a comprehensive review of its program, looking at staffing levels, funding, agency policies and regulatory structure, WVDEP said.

A total of more than 500 Marcellus Shale-targeted wells have been drilled in West Virginia, according to WVDEP.

A third accident occurred June 7 when a section of pipe on the North Texas system about 15 miles south of Godley, TX, ruptured after it was reportedly struck by utility workers. One worker was killed and eight were injured. Enterprise Products Partners LP expected to have completed repair of the rupture by June 12.

Curtailments had been approximately 250 MMcf/d, Enterprise said, but all customers except for two producers were rerouted.

The North Texas pipeline is a 36-inch diameter, 395-mile segment from the Waha Hub in West Texas to the Carthage Hub in East Texas. It has the capacity to transport approximately 800 MMcf/d. Enterprise owns a 50% interest in and operates the segment.

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