Reduce

Chesapeake Energy Corp. has completed sales of its Permian Basin properties, which allows it to reduce the outstanding balance on existing term loans to $1.2 billion from $4 billion by the end of this month. The company said it plans to fully repay the term loans by the end of the year. The assets sold produced close to 21,000 b/d of liquids and 90 MMcf/d of natural gas in 2Q2012, or about 5.7% of Chesapeake’s production during the period. The multi-sales package was announced in September (see Shale Daily, Sept. 13). SWEPI LP, a subsidiary of Royal Dutch Shell plc, bought the southern Delaware Basin assets, while the northern Delaware Basin portion was sold to Chevron U.S.A. Inc., a subsidiary of Chevron Corp. The producing assets in the Midland Basin were sold to affiliates of Houston-based EnerVest Ltd.

Replacing coal-fired power plants in Texas with natural gas combined cycle plants would reduce freshwater consumption in the state by an estimated 53 billion gallons annually — 60% of coal power’s current water footprint — according to a report by researchers at the University of Texas at Austin (UT).

GreenHunter Water LLC recently began handling water disposal services at its newly completed salt water disposal (SWD) facility near Helena in Karnes County, TX. The facility is composed of new storage tanks and a fully contained offloading platform that features four unloading tractor trailer bays, a 150 hp pumping system and 2,400 bbl of onsite storage. The newly drilled SWD well was completed to the Middle Wilcox formation at a total depth of 7,800 feet. Green Hunter Water is a unit of GreenHunter Energy Inc. “We expect demand for Class II injection capacity in this part of the Eagle Ford Shale play to remain robust due to the increased drilling in the region directly related to the successful drilling efforts by operators in the ‘oil window’ of the Eagle Ford,” said Green Hunter Energy President Jonathan D. Hoopes. “With this new well now online and the facility operational, GreenHunter Water’s total owned disposal capacity has reached 35,000 bbl per day from a total of seven SWD wells located in five states.”

Replacing coal-fired power plants in Texas with natural gas combined cycle plants would reduce freshwater consumption in the state by an estimated 53 billion gallons annually — 60% of coal power’s current water footprint — according to a report by researchers at the University of Texas at Austin (UT).

To reduce the amount of drilling waste that has to be transported to landfills and to provide a renewable solution, Chesapeake Energy Corp. has begun an innovative recycling project with TWMA Ltd. in the Eagle Ford Shale.

The Railroad Commission of Texas (RRC) is proposing to amend its rules relating to water protection to allow for a wider variety of recycling activities. The existing rules contemplate two categories of commercial recycling facilities: mobile and stationary. Since adoption of the rules in 2006, RRC has received an increasing number of applications for permits for facilities that fit neither category. Therefore, RRC proposed to create a third category: a semi-mobile commercial recycling facility. It proposes to authorize on-lease, non-commercial recycling of produced water and/or hydraulic fracturing (fracking) flowback fluid, and to clarify requirements for off-lease or centralized noncommercial recycling of produced water and/or fracking flowback fluid. It also proposes to amend the definition of “fresh makeup water pit” to allow use of such a pit in conjunction with fracking of an oil or gas well for the storage of fresh water or treated fracking flowback fluid used to make up fracking fluid for use in a new well. The changes are intended to reduce the demand for fresh water for fracking. The proposal was recently published in the Texas Register.

Canada’s natural gas producers on Thursday threw their support behind an indepth study by the British Columbia (BC) Oil and Gas Commission (OGC) on “observed induced seismic activity” in the Horn River Basin, which concluded that operators should conduct more monitoring and data collection to ensure continued community safety.

The nation’s natural gas resources, which have grown with the expanded potential of shale plays — including as much as 20 years supply from the Marcellus Shale — can be used to cost-effectively generate electricity, and any environmental burdens will come primarily from combustion when the fuel is used, not when it is extracted, according to a report from the Department of Energy (DOE).

Royal Dutch Shell plc, which operates the Athabasca Oil Sands Project (AOSP), said late Monday its oilsands operations have achieved a production milestone of 500 million bbl since production began in 2003. Current production capacity has reached 255,000 b/d, Shell said.