Summit

Marcellus Shale gas already is displacing pipeline flows from the west, an energy analyst said Tuesday at the Argus Marcellus Shale Gas Summit 2010 in Houston.

Rex Energy Corp. said it completed its Marcellus Shale joint venture (JV) transaction with Summit Discovery Resources II LLC, a subsidiary of Sumitomo Corp. (see Daily GPI, Sept. 1). After final adjustments, Sumitomo paid Rex about $99.5 million in cash for close to 13,000 net acres, a partial interest in some producing wells and associated midstream assets. the cash payment included a $7.5 million reimbursement for drilling-related expenses incurred to date, which was applied against the drilling carry. At closing Sumitomo’s remaining drilling carry balance was about $51.2 million, which will be used to cover 80% of Rex’s costs to drill and complete additional wells within the areas of mutual interest identified in the JV agreement.

The G-20 nations Sunday in Toronto pledged to continue with their effort to phase out subsidies for oil, natural gas and coal. But the agreement — like the one forged at the summit in Pittsburgh last year — lacks teeth because it doesn’t include a timetable for when the subsidies should be unwound (see Daily GPI, Sept. 28, 2009).

At the Midyear Issues Summit in Point Clear, AL, the chairman of the Interstate Oil and Gas Compact Commission (IOGCC) said the group’s 30 member states and seven associate member states will continue to push for federal funding to plug orphaned wells in the states. Commission Chair John Hoeven, governor of North Dakota, said the IOGCC remains committed to environmental protection, and in particular the abandoned wells. “There are believed to be tens of thousands of orphan wells in this country,” said Hoeven. “Many of these wells are very shallow and pose no risk to the environment. However, there are others that are unplugged or inadequately plugged and are a genuine threat to the environment and safety. We have focused on these problem wells and are working with Congress on federal funding for a permanent fix.” The IOGCC also renewed a memorandum of understanding (MOU) with the Environmental Protection Agency (EPA). The MOU was created in 2002 to improve regulatory cooperation among the states and the EPA, to promote protection of the environment in a cost-effective manner, to minimize regulatory duplication between the state and national levels of government and to increase efficiency and communication.

It’s been a long time coming, but Double Eagle Petroleum has spudded a wildcat, Table Top Unit No. 1, in the Christmas Meadows prospect in Summit County, UT, at the intersection of the Overthrust Belt and the Unita Mountains in the corner of the Green River Basin play. The hold-up on going into what is believed to be a large anticline dome first spotted by Gulf Oil in the 1970s, has been getting a permit to drill in the environmentally sensitive area up against the High Unita Mountain Wilderness area. Others — Amoco and Chevron — staked it out and then moved on after years of waiting. Permitting for Double Eagle has involved dealing for more than 10 years with both the National Forest Service and the Bureau of Land Management. Double Eagle first acquired some leases in 1984 and has added to them, acquiring the last critical acreage in 2003. The company now has an interest in 41,237 gross acres, according to CEO Steve Hollis, who says they are estimating initial drilling time for the first well at about 100 days — or before Christmas. Double Eagle has a 25% working interest in the Christmas Meadows prospect. The first well is initially targeting the Frontier and Dakota formations, both combination oil and gas plays, at about 15,000 feet. “Once we know the structure is there, we can go deeper,” Hollis said. The deeper plays in the area of 20,000 feet likely would be all gas. Some estimates have put potential reserves at 2 Tcf.

It’s been a long time coming, but Double Eagle Petroleum has spudded a wildcat, Table Top Unit No. 1, in the Christmas Meadows prospect in Summit County, UT, at the intersection of the Overthrust Belt and the Unita Mountains in the corner of the Green River Basin play.

As his statewide summit on global climate change was getting under way in San Francisco Tuesday, California Gov. Arnold Schwarzenegger released the copy of a letter the governor sent to President George W. Bush Monday requesting that California be given a waiver from federal preemption of its greenhouse gas (GHG) emissions standards. Schwarzenegger was following up on a request his Resources Agency made last December.

American Petroleum Institute (API) President Red Cavaney said last week at a two-day LNG Ministerial Summit in Washington, DC, that gas and oil industry associations will launch a new LNG coalition, The Center for Liquefied Natural Gas, in January. The coalition will provide public education regarding LNG and advocacy functions.

American Petroleum Institute (API) President Red Cavaney said Wednesday at a two-day LNG Ministerial Summit in Washington, DC, that gas and oil industry associations will launch a new LNG coalition, The Center for Liquefied Natural Gas, in January. The coalition will provide public education regarding LNG and advocacy functions.