Wells

Apache Corp. is off to “fast start” in 2010 with eight consecutive successful wells in the Gulf of Mexico, CEO G. Steven Farris said Thursday.

Natural gas wells in East Texas continue to show promising initial production (IP) rates, Goodrich Petroleum Corp. said Tuesday.

The American Petroleum Institute (API) Monday published a new guidance document outlining current best-industry practices for the proper drilling and cementing of wells that are being hydraulically fractured. The document, “Hydraulic Fracturing Operations — Well Construction and Integrity Guideline,” is designed to ensure that shallow ground water aquifers and the environment are protected throughout the drilling, completion and production phases of a well’s life, according to API. “The guidance document helps supplement and support existing state regulations to ensure that development of our nation’s abundant natural gas resources is safe and effective,” said API Upstream Director Doug Morris. A free .pdf of the guidance document is available at www.api.org/Publications/epstandards/. A hard copy may be purchased for $40 from www.api.org/publications or by calling IHS at (800) 854-7179.

Houston-based Cabot Oil & Gas Corp. has been fined $56,650 for three spills in September of a liquid gel used to fracture natural gas wells, the Pennsylvania Department of Environmental Protection said. The spills, which occurred in one week’s time at Cabot’s Heitsman gas development in Dimock Township in Susquehanna County, forced Cabot to cease drilling activities in the region for around three weeks until it complied with a state order (see Daily GPI, Oct. 20; Sept. 28). “This penalty was assessed for Cabot’s violations of the Clean Streams Law, Solid Waste Management Act and Oil and Gas Act,” said DEP Northcentral Regional Director Robert Yowell. “We expect that Cabot will do a better job in the future of overseeing its contractors now that the company has an improved preparedness, prevention and contingency plan in place.”

The big, sustained rally in 2010 U.S. natural gas prices predicted by some on Wall Street likely will fizzle as soon as the uncompleted wells and shut-in supply flood back into the market, energy analysts said last week.

The big, sustained rally in 2010 U.S. natural gas prices predicted by some on Wall Street likely will fizzle as soon as the uncompleted wells and shut-in supply flood back into the market, energy analysts said Monday.

Natural gas production is being curtailed in pockets across North America and some completed wells are not being hooked up, events that energy analysts say are inevitable, given weak prices and a growing list of storage-related operational flow orders (OFO).

Marathon Oil Corp. has completed drilling all four development wells on the deepwater Gulf of Mexico (GOM) Droshky project, but onshore spending has been curtailed because of lower natural gas prices, the producer said. Well completions at the Droshky project are under way and production is on track to begin in 2010, with peak net output estimated at 43 MMcf/d of natural gas and 45,000 b/d of oil (see NGI, Nov. 3, 2008). Marathon earned $413 million net (58 cents/share) in 2Q2009, compared with $774 million ($1.08) in 2Q2008. The producer’s average realized U.S. gas price was $3.60/Mcf in 2Q2009, compared with $8.66 a year earlier. U.S. E&P operations lost $41 million in the quarter versus earnings of $359 million in 2Q2008, as revenues plunged 60% on lower commodity prices. Marathon’s net U.S. gas sales fell quarter/quarter to 365 MMcf/d from 431 MMcf/d, and U.S. hydrocarbon liquids sales rose slightly to 64,000 boe/d from 63,000 boe/d. The company’s integrated gas segment, which includes liquefied natural gas, reported profits plunging to $13 million in 2Q2009 from $102 million in 2Q2008, mostly on lower price realizations.

Dallas-based Pioneer Natural Resources Co. stopped drilling natural gas wells in its core Raton Basin and Midcontinent properties in the first six months of this year, but it continues to test a smattering of potential U.S. gas plays, including the Eagle Ford Shale in South Texas, the company said late Tuesday.