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Permalink Reply by Robert Allingham on October 23, 2014 at 4:32am

Great article Frank W.. Thanks for sharing.

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Permalink Reply by Frank Walker on October 23, 2014 at 9:42am

Sure.  No problemo.

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Permalink Reply by James Foster on October 23, 2014 at 8:10am

In Ohio there have been a few companies that have received permission to put laterals closer together than the typical 1000 feet.  Since each horizontal well is it's own well at ODNR and has it's own permit initially they were each required to have 500 feet set back from next well or neighboring unleased property.  But since well drillers are putting together big 640 acre and 1280 acre units and putting several wells in them some have gotten special permission to experiment with just how far out can one well reach and get product. It has been the theory to date that they can draw from 500 feet on each side of the horizontal well bore and maybe less than that.  What the drillers are trying to discover is will horizontals closer together increase production or just pull everything up faster ... the "cross talk" you mention I believe.  If they are already getting max production at 500 feet apart then the cost to drill the extra wells in the middle say 250 feet apart is not worth it but if they can produce more it will be worth it.  The outside edge of the production unit .... border with unleased land ... will remain at 500 feet for now.  There are so few of these in Ohio that I pretty sure they don't have enough data yet to say but in other states, like PA, I believe they are putting them closer together then we do in Ohio.  I think only time will tell.  Drillers will begin to petition ODNR and other agencies that regulate drilling to change the regulations if it's worth it and then it will become SOP  Standard Operating Procedure.  I haven't read much about other states regulations since we live in Ohio, I have paid more attention to Ohio.

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Permalink Reply by Frank Walker on October 23, 2014 at 9:37am

James

Appreciate your post very much.  Thanks.  Good of you to respond.

As I wrote in the OP, the article is not written from standpoint of landowners like us.  I'm a leased landowner.  Thus, I care a lot where my gas goes, after being freed from my shale, and upon being harvested.  Specifically:

If my gas goes to a wellhead which is one of several within a unit in which I participate, well, that's fine.  It is great!  It means I will get my share of the royalty money for that harvested gas, exactly as I should.

But if there is (what I'm calling for lack of a better term) "crosstalk" between units, and if a neighboring unit (where I've no participation) is under heavy development while my unit remains still undrilled, or only partially drilled, then some of my gas from my shale is going to be produced with no royalty money for me.  Instead, the participants in the neighboring unit will benefit.

I guess my sensitivity to this situation is owing to personal experience.  I'm in lightly producing units with fully developed units right alongside that have been active for several years.  I doubt anyone can assign numbers (i.e., amount of loss) or even know if crosstalk is happening.  I certainly cannot.  But in any unit, following several years of production, pressures will fall, while in adjacent inactive units pressure will remain relatively high.  To the extent crosstalk exists, this will cause gas from the less active unit to flow to the active one.

So now you see why I thought the article was interesting.  It addresses some of this stuff though, again, not at all from our standpoint and not with consideration for our (landowner's) concerns.

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Permalink Reply by James Foster on October 24, 2014 at 9:25am

Not sure what state you are in so I don't know what the set back law is there.  But it is my understanding that the companies are unsure if they are getting all the product using the 500 foot boundaries.  That is why here they are experimenting with 750 feet between laterals (normal here is 1000 feet), 500 and even closer.  With a traditional Clinton, Roserun, sandstone well I fully understand your concerns.  The deposit is fluid and can easily be pulled from under someone else's property without that person being leased.  In Ohio years ago they made the required units bigger the deeper you were drilling even for a vertical well to try to limit this some.  Not sure if that actually worked back then.  Now with shale and having to frack it I think it is unlikely they are drawing from a great distance away from the horizontal well bore.  The further away from the charges the more difficult it is to get the sand in there to prop open the shale.

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Permalink Reply by Frank Walker on October 24, 2014 at 9:48am

James

Appreciate the post.  Surely hope you're right.  Here is my take:

"Crosstalk", or "communication", between wells and units can take place for at least two reasons, possibly more.  First, there are naturally occurring fissures and fractures in the shale.  These can cross unit boundaries.  Second, if a frac job reaches out to another unit, then natural gas can flow from within that unit into the one wherein the fracking originated.

In my view, naturally occurring fissures and fractures can drain only a limited amount of gas.  I don't know how much.  Over the years I have guessed less than 10%, and much more likely less than 5% of a landowner's gas could be lost this way.  (Most of) our gas is locked into our shale.  If the shale remains unfracked, most of the gas is protected from theft.

However, consider if you will the following scenario related to boundary shale:

Unit next door is drilled, fracked, and heavily produced over several years . . to the point of significantly reduced pressure.  Not to worry.  They did not frac your shale.  Your gas, even your boundary gas, is locked up tight.

Time passes.  More time passes.  I'm talking years.

Finally gasco gets 'round to developing your unit.  Sure, pressure next door is by now very low comparatively.  But your gas remains locked up in the shale and safe.  You feel good.

So they drill your unit and what comes next . . they frac the new wells in your unit.  At that moment we have a situation where your gas is free easily to escape next door.  There is still some pressure over there so more gas will flow to your own unit's wellhead(s) and you will be paid for that.  But a significant amount can escape next door, over to that (by now) depressurized unit, and you don't get paid for that.

Exact science?  Far, far from it.  Just a little food for thought. 

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Permalink Reply by D.C. Harris on October 27, 2014 at 4:09am

Thanks, James.  Your comment is informative and helpful.  I have a different spacing concern from the "cramming" concern expressed above (and must admit I haven't yet read the article).  Anyway --- I'm concerned about the drilling companies creating units and spacing them without regard for whether all of the land will end up being able to be used (drilled under).  New York had to pass a law forcing the drilling companies to space wells properly, that is, with consideration for the neighboring landowners who want to be in future units.  New York drillers were leaving gaps between units that were too small to be worth anyone's while to drill under in the future.  I'm very concerned about this problem in Ohio.  I'm hoping Chesapeake and others have anticipated Ohio passing a law similar to New York's so they're planning ahead and spacing properly, but I just don't know.  Well placement around me seems scattered.  We're already on the edge of a unit (in which Chesapeake so graciously included .012 acres of our land [a square smaller than the size of our living room] in order to lock us in), and if the next well pad (for six wells) doesn't go in a particular spot, we will be totally stiffed.  I've done all the calculations, followed all the trajectories, and there's no way the other 99.999% of our land will be put in a unit unless the wells are perfectly spaced.

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Permalink Reply by Jack Straw on October 23, 2014 at 10:22am

Regarding the article "Oil Producers Cramming Wells in Risky Push to Extend Boom"

It is my opinion that the authors crammed a lot of nonsense into one useless article!

Operators downspace until they determine the optimum spacing ..... this is what they do to determine the best way to economically exploit a given area; the time value of money is taken into account in this process. This process of downspacing is what the industry has historically done; you infill until you determine the optimum spacing. A simple pulse test will demonstrate when wells begin to be in (unwanted) communication with one another.

The authors begin with a pejorative headline using the words 'cramming' and 'risky' for an article whose title more accurately should have been "Oil Producers use Downspacing to Maximize Economical Return in the Face of Lower Oil and Gas Prices".  

If you wish to obtain an accurate understanding of the value of downspacing, I suggest that you go to the very last of the article where it reads "

In 2013, Marathon’s Eagle Ford wells that were tested at the closest spacing levels were 34 percent more prolific after six months compared to wells spaced further apart in 2011.

“What we see is that we are getting better over time,” Robertson said in an April interview. “We have a very small body of knowledge about this kind of spacing so far in the industry, but this is our single greatest opportunity to create greater value.”"

The article is very misleading .... trying to sensationalize a routine process in a manner that implies that there is something 'risky' or 'wrong' about a process that really is all about a long used prudent methodology that strives to leave less 'orphaned' oil/gas in the ground (while maximizing economic return for O & G Operators and Royalty holders).

Read the article carefully and without prejudice .... but with a keen eye to logic .... ignore the headline, it is meant to confuse and inflame.

All IMHO,

                  JS

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Permalink Reply by Philip Brutz on October 26, 2014 at 10:07am

Th

http://www.wvgazette.com/article/20141022/GZ01/141029671/1125               

Wednesday, October 22, 2014

‘Near-catastrophic’ blowout leaves chem firm wary

By Ken Ward Jr., Staff writer

As the Tomblin administration considers a plan to allow natural gas drilling under the Ohio River, a major chemical maker in Marshall County has been fighting a proposal for hydraulic fracturing near its plant, citing a “near-catastrophic” gas-well incident last year that might be linked to geologic conditions beneath the river.

Atlanta-based Axiall Corp. has been waging a legal battle to stop Gastar Exploration from fracking natural gas wells that Gastar had drilled on Axiall property under leases Gastar obtained from PPG Industries, the former owner of Axiall’s chlorine and caustic soda plant at Natrium, located along the Ohio near the Marshall-Wetzel county line.

Axiall says it is concerned about a repeat of an August-September 2013 incident it blames on high-pressure fracking fluids being used by another company, Triad Hunter, to release natural gas from the Marcellus Shale at a well site on the other side of the river.

In court documents, Axiall lawyers say increased underground pressure from the fracking at Triad Hunter traveled under the river and somehow made contact with brine wells Axiall uses to obtain saltwater, one of the key materials used in its manufacturing process. Axiall says those pressures led to a blowout in which one of its brine wells at its plant “began spewing flammable natural gas.”

No injuries were reported, but parts of Axiall’s brine production were closed for more than six months for repairs and the company had to set up several large flares to burn off excess natural gas. Axiall was “fortunate to have been able to limit the environmental impact of the Triad Hunter incident and avoid bodily injury or loss of life due to a natural gas explosion or other disaster,” the company says in court records.

In a lawsuit filed in Pennsylvania, Axiall lawyers asked that Gastar be forced to conduct far more extensive underground investigations to determine if its gas operations pose a threat of a similar incident, and that it be required to submit more detailed plans for avoiding any damage to the Axiall facility.

“Gastar’s plan to blindly stimulate these wells by injecting fluid at extremely high pressure in order to ‘rubble-ize’ the Marcellus Shale is careless, dangerous, shortsighted and in breach of the lease agreement that permits Gastar to explore for and extract oil and gas in that area,” lawyers for Axiall subsidiary Eagle Natrium LLC argued in court filings.

Axiall lawyers said the company “supports the responsible development of natural gas” but that “extra care must be taken” when operating in the vicinity of its saltwater wells, which “are essential to the continued operation of a billion-dollar chemical plant that employs 500 people.”

Lawyers for Gastar responded that the company had “carefully studied and planned its drilling and fracturing operations in the Marcellus Shale” and that “potential” or “possible” risks were not enough to warrant the “sweeping, mandatory injunction” that Axiall sought.

On Tuesday, Allegheny County Judge Christine Ward issued a two-page order that denied Axiall’s motion for a preliminary injunction to stop Houston-based Gastar from fracking wells at the Natrium site. The order said a more detailed court opinion would be filed later.

Mike McCown, chief operating officer for Gastar, said his company is pleased with the decision “as we have continually believed the allegations were without merit.” Axiall officials would not comment on the decision or on whether the company plans to appeal.

The legal battle between Axiall and Gastar comes amid continued citizen concerns about the effects on the environment and on small, rural communities of the Marcellus Shale natural gas drilling and production boom in Northern West Virginia.

In recent weeks, critics of the boom have focused their attention on Gov. Earl Ray Tomblin’s proposal to lease rights for private companies to drill and produce natural gas from state-owned reserves under portions of the Ohio River.

One of three areas targeted by the administration for potential lease runs along Marshall County, about two miles upriver from the Axiall facility. A second of the areas targeted for potential leasing is just south of the plant and includes about a half-mile of area that Axiall has identified as being within its “area of concern” about drilling, said Deputy Commerce Secretary Joshua Jarrell. Jarrell said another area of the river, located just alongside the plant, was initially being considered for lease but was withdrawn from consideration — at least for now — until the issues being raised by Axiall are resolved.

Jarrell said officials from his agency met with the state Department of Environmental Protection and with Axiall to discuss the company’s concerns.

“We certainly took them seriously, and under advisement,” Jarrell said Wednesday. “We certainly want to see anything with regards to development done safely and reasonably.”

Jarrell said any agreements the state makes for leasing under the river would require drilling companies to obtain permits from the DEP, and that the state would consider additional language that specifically requires the issues raised by Axiall to be resolved to the DEP’s satisfaction.

“[The] DEP is the agency that is going to evaluate the safety of the process, and we would certainly defer any of those questions to them,” Jarrell said.

James Martin, chief of the DEP’s Office of Oil and Gas, said Wednesday that Gastar had obtained three permits in the area of the Natrium plant before the blowout incident. Gastar also has other permit applications pending at the facility and was identified by the state as the high bidder on the river section Axiall is most concerned about, state officials said.

Martin said his agency is looking at its options for adding some conditions to the three existing permits to require additional safety precautions by Gastar.

“We’re looking at that, and we’re considering whether or not some measures need to be taken to minimize the likelihood of something like that happening,” he said. “At this point, our expectation is that there would be no operations take place until we get done what we need to do with the conditions or an order.”

The Axiall plant’s operations date back to the 1940s, when the facility was opened to tap into a huge salt deposit located far beneath the surface. The plant uses salt mined from these subsurface deposits to produce chlorine, caustic soda and hydrogen, as well as hydrochloric acid and calcium hyperchloride.

In February 2011, then-plant owner PPG issued a news release announcing that it had reached agreement with Gastar on a lease that would eventually involve more than 30 natural gas wells on the Natrium property. Gastar would hire additional employees for the work, and PPG estimated the deal would generate for it about $50 million over 30 years, including an initial payment of $10 million.

“When developed responsibly, Marcellus Shale resources represent a fantastic opportunity in our region to promote jobs and secure an abundant source of U.S.-based energy for our homes and our businesses,” Michael McGarry, PPG’s senior vice president, said in the release. “We are pleased to be working with Gastar Exploration on this exciting project and believe that this development continues to demonstrate PPG’s commitment to the long-term sustainability of our Natrium plant.”

Axiall purchased the Natrium facility from PPG in January 2013, and plans for the natural gas drilling continued — until the blowout incident.

Reach Ken Ward Jr. at kward@wvgazette.com, 304-348-1702 or follow @kenwardjr on Twitter.

- See more at: http://www.wvgazette.com/article/20141022/GZ01/141029671/1125#sthas...

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Permalink Reply by Philip Brutz on October 26, 2014 at 10:10am

http://www.wvgazette.com/article/20141025/GZ01/141029437/200407122               

Saturday, October 25, 2014

Marcellus expert says more scrutiny needed of fracking near Marshall chemical plant

By Ken Ward Jr., Staff writer

One of the nation’s best-known experts on the Marcellus Shale concluded that more investigation is needed before a Houston firm is allowed to move forward with natural gas wells near the site of a “near-catastrophic” fracking incident at a Marshall County chemical plant.

Penn State geologist Terry Engelder, who did groundbreaking work about the gas reserves available in the Mar..., testified in a Pennsylvania case in which Axiall Corp. was trying to delay and force a more detailed review of its plans for hydraulic fracturing wells at Axiall’s manufacturing plant in Natrium.

“There are certainly things that can be done to gather more information that would help in understanding,” Engelder testified during a June hearing in Allegheny County Common Pleas Court. “One would hope that information would be gathered.”

Engelder and another Axiall expert, petroleum engineer Brun Hilbert, testified concerns that Gastar’s wells could lead to a repeat of an incident last year that Axiall blames on high-pressure fracking fluids being used by another company, Triad Hunter, to release natural gas from the Marcellus Shale at a well site across the Ohio River.

In court documents, Axiall says that increased underground pressure from the fracking at Triad Hunter traveled under the river and somehow made contact with brine wells Axiall uses to obtain saltwater, one of the key materials used in its manufacturing process. Axiall says those pressures led to a blowout in which one of its brine wells at its plant “began spewing flammable natural gas.”

No injuries were reported, but parts of Axiall’s brine production were closed for more than six months for repairs and the company had to set up several large flares to burn off excess natural gas. Axiall was “fortunate to have been able to limit the environmental impact of the Triad Hunter incident and avoid bodily injury or loss of life due to a natural gas explosion or other disaster,” the company says in court records.

Last week, Allegheny County Judge Christine Ward refused Axiall’s request for a preliminary injunction against Gastar.

Gastar said it was pleased with the ruling, believes Axiall’s allegations in the case were without merit, and planned to move forward with its fracking “in the near future.” In a recent filing with the U.S. Securities and Exchange Commission, Gastar said that leases adjacent to the Natrium plant account for nearly one-fifth of its total gas reserves.

The judge’s decision dropped the issue squarely in the lap of the West Virginia Department of Environmental Protection, which had already issued several permits for Gastar’s operations in the area and has several other permits pending. DEP met with Axiall and was considering options for adding some conditions to Gastar’s permits to try to prevent any problems.

Public disclosure of the situation and contact from Axiall on the issue prompted Gov. Earl Ray Tomblin to schedule a meeting Oct. 23 with DEP Secretary Randy Huffman to find out more. Chris Stadelman, Tomblin’s communications director, declined to say if the governor shares Axiall’s concerns about Gastar’s planned operations, but said Tomblin “decided it was important enough to be briefed about.”

“The DEP is responsible for permitting issues and will continue to monitor activity related to that site,” Stadelman said Friday.

Details of the controversy emerged last week as Tomblin and the Commerce Department continue to review bids on the governor’s proposal to lease rights for private companies to dr... from state-owned reserves under portions of the Ohio River, including at two sites near the Natrium plant.

Environmental groups oppose the idea, and have urged the governor to drop his proposals. Stadelman did not indicate that the Axiall situation had given the governor any second thoughts about the Ohio River leasing proposals,

The Natrium plant leases with Gastar were agreed to by PPG Industries two years before PPG sold the facility to Axiall in January 2013. The plant’s operations date back to the 1940s, when the facility was opened to tap into a huge salt deposit located far beneath the surface. The plant uses salt mined from these subsurface deposits to produce chlorine, caustic soda and hydrogen, as well as hydrochloric acid and calcium hyperchloride.

Hilbert, Axiall’s engineer, testified that the Hunter Triad incident “demonstrates the presence of a highly conductive zone in the Marcellus Shale that allowed frack fluid under very high pressure to travel through the Marcellus Shale from Triad Hunter’s wells, under the Ohio River” to the Natrium plant. This, Hilbert said, provided evidence of “a preexisting natural high conductivity path” that allowed for “communication between Triad Hunter’s natural gas wells and” the Natrium plant’s brine wells.

Engelder testified that Gastar’s wells could pose a similar “risk” to the Natrium facility, and recommended a “first-class” three-dimensional seismic study be conducted to examine that possibility. Axiall wanted the judge to order such a study, but Gastar argued that “potential” or “possible” risks were not enough to warrant a “sweeping, mandatory injunction.”

Reach Ken Ward Jr. at kward@wvgazette.com, 304-348-1702 or follow @kenwardjr on Twitter.

- See more at: http://www.wvgazette.com/article/20141025/GZ01/141029437/200407122#...

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Permalink Reply by Philip Brutz on October 27, 2014 at 3:26am

It looks like the salt mine property is about 1500 feet from the nearest lateral.

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Permalink Reply by The Hiker on October 27, 2014 at 11:16am

They have been "mining" salt since 1942 at this location.   As I understand it, water is forced into the salt deposit causing it to go into solution and then the saltwater is pumped to the surface.   If they have been dissolving the salt bed for 72 years, there is one big cavern down there at 7000'.   I don't know how thick the bed is, or how far it stretches NSEW, but I could imagine that after 72 years there is one big cavern and I'm not surprised that natural gas has entered the chamber.   Why, that cavern could stretch to Columbus or Pittsburgh lol....If a frack job opened up a pathway into the chamber....well, it all makes sense that the chemical company would see flames coming out of their little calcium chloride grotto.  Yes, a dangerous situation.

One would imagine that a bit of seismic investigation would reveal the extent of the hole down there, but then the landowners in the area might have an issue with the company encroaching and stealing their minerals (salt) without their permission, so I'll betcha this little factoid is best swept under the rug.  Might be a lot of unintended lawsuits coming out of this....fertile ground for a good ambulance-chaser.  Good class action stuff.

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