Brings

Shale gas production is projected to increase to the point where it becomes the dominant domestic gas supply over the next two decades, but it brings with it the “greatest source of uncertainty” facing North American gas markets, according to the Deloitte Center for Energy Solutions.

The Morgantown City Council is considering a resolution to request that West Virginia stop issuing drilling permits in its portion of the Marcellus Shale “until comprehensive legislation and inspection resources for horizontal well drilling are established to effectively protect public water resources, public health and public safety.” The resolution echoes the sentiments of a group of West Virginia House of Delegates members who have called on the state Department of Environmental Protection to institute a drilling ban until the legislature is called into special session and passes new Marcellus regulations (see Shale Daily, March 21). The legislature failed to pass proposed Marcellus regulations this year, and Gov. Earl Ray Tomblin has said he isn’t likely to give lawmakers a second chance by calling a special session (see Shale Daily, March 17; March 15). Recently Lewisburg, WV, the county seat of Greenbrier County, also called for a special session to address Marcellus issues. The Morgantown City Council could vote on the resolution Tuesday (April 5).

Republican Gov. Bobby Jindal told members of the Louisiana Mid-Continent Oil and Gas Association (LMOGA) Thursday that he would veto any bill to repeal or lower severance tax exemptions for horizontal drilling, which would keep producers operating in the Haynesville Shale.

With the month of December — and the cold it normally brings — right around the corner, natural gas futures traders on Monday forced the December natural gas futures contract back above $4 for the third time in just more than a week. The prompt-month contract reached a high of $4.106 before closing Monday’s regular session at $4.088, up 15.1 cents from Friday’s finish.

Dallas-based EXCO Resources Inc. has approved a $123 million increase to its 2008 capital budget, which brings total capital spending for 2008 to $923 million. EXCO will allocate $90 million to explore its Haynesville Shale acreage in northwestern Louisiana. EXCO has more than 100,000 net acres in the Haynesville play, and it is planning to drill both horizontal and vertical wells and develop infrastructure to support future growth. Another $30 million will be used for additional drilling in the Vernon Field in Louisiana, $2 million will go for more drilling in its Cotton Valley acreage in Texas and about $1 million will be used for information technology initiatives. This revised 2008 capital spending budget is expected to be fully funded through internally generated funds.

In a move that brings in four new executives from outside, PG&E Corp. Thursday announced changes at the top of both its utility holding company and its utility, Pacific Gas and Electric Co., adding board chairman to Peter Darbee’s president/CEO responsibilities at the head of the parent company, and making Thomas King president/CEO of the utility. The changes are effective Jan. 1, 2006 with the retirement of board Chairman Robert Glynn, former CEO.

Duke Energy said Tuesday it reached a settlement agreement in principle that resolves all claims for refunds by California, Oregon and Washington parties arising out of the western electricity crisis in the 2000-2001 time period, as well as various class-action complaints against the company by several western states. But the agreement allows California’s attorney general to continue probing the company’s activities in the natural gas market for the next 30 days.

Shell Exploration & Production said it resumed production from its Mars tension leg platform in Mississippi Canyon 807 in the Gulf of Mexico last Monday following completion of repairs to the flexjoints on both its oil and natural gas export lines. The platform is currently pumping down the process vessels, and production is expected to reach its pre shut-in rate of 150,000 bbl/d of oil and 170 MMcf/d of gas within two to three days.

Shell Exploration & Production said it resumed production from its Mars tension leg platform in Mississippi Canyon 807 in the Gulf of Mexico on Monday following completion of repairs to the flexjoints on both its oil and natural gas export lines. The platform is currently pumping down the process vessels, and production is expected to reach its pre shut-in rate of 150,000 bbl/d of oil and 170 MMcf/d of gas within two to three days.