Leases

Pennsylvania officials are renewing their effort to get fellow members of the Delaware River Basin Commission (DRBC) to agree to revised water quality regulations that could ultimately open the basin to expanded Marcellus Shale natural gas drilling.

Wyoming’s Office of State Lands and Investments has tightened the limits to extend coalbed methane (CBM) leases that aren’t held by production in the midst of growing requests because of sagging natural gas prices.

Interior’s Bureau of Land Management (BLM) office in Alaska has issued a call for nominations and comments on tracts for oil and leases to be offered in the National Petroleum Reserve in Alaska (NPR-A) in November. The notice, which was published in the Federal Register (FR) Tuesday, is subject to a 45-day comment period.

Although only two of its counties overlay the Marcellus Shale, Maryland could earn on average about $441 million in severance taxes over a 30-year period if drilling were permitted there, according to a report released Thursday by the Maryland Petroleum Council (MPC).

The Bakken Shale and underlying Three Forks formation in North Dakota are the latest targets for independent exploration and production company Breitling Oil and Gas Corp., which in 2011 reported progress in oil and gas projects in its focus areas in Texas, Oklahoma and Louisiana.

Magnum Hunter Resources Corp. is raising its production guidance for this year and next year based upon better-than-expected well results, according to the Houston-based company. Magnum Hunter is currently producing 12,500 boe/d, compared to its 10,000 boe/d guidance for the year. The company expects to close out 2012 producing 14,500 boe/d, up from its previous projection of 13,000 boe/d. Magnum Hunter operates in the Marcellus, Eagle Ford and Bakken shales. “We are very fortunate to have three resource plays within our portfolio that are now ‘hitting on all cylinders’ and providing an increase in our overall production levels well above expectations,” said CEO Gary C. Evans. “This is especially rewarding when our management team has been able to achieve these milestones while also staying within our original capital budget plan.”

Indigo II Louisiana Operating LLC said it has made a new oil discovery in central Louisiana with its first horizontal well targeting the Louisiana Eagle Ford Shale (LA Eagle Ford).

In what’s become a larger-than-life drama, natural gas is the energy growth engine for the next 20 years, and hydraulic fracturing in North America is the driver, according to ExxonMobil’s Paul Greenwood, vice president for Americas gas marketing, in keynote remarks at a gas industry meeting in Los Angeles Tuesday.

NuStar Energy LP has signed separate deals with Valero Energy Corp. and EOG Resources Inc. that will affect several shale plays. Under the Valero deal, NuStar will construct a new pipeline to transport Eagle Ford crude oil to Valero’s processing plants. Meanwhile, EOG will ship 70,000 b/d of crude oil from the Bakken, Eagle Ford and other shale plays by train to NuStar’s terminal at St. James, LA, and will add 360,000 bbl of storage capacity there. NuStar’s share of construction costs should be between $30 million and $40 million.