Posts Tagged ‘Houston’

By Steve McConnell (Staff writer)
Published: July 1, 2010

A massive landowners’ alliance in Wayne County is considering filing a lawsuit against an environmental regulatory agency that recently placed a blanket moratorium on natural gas drilling in the Delaware River watershed in part because of the potential loss of $220 million in payments to leaseholders.

The alliance hired international law firm Greenberg Traurig to begin preparing litigation against the Delaware River Basin Commission, said alliance spokesman Peter Wynne. The hiring came after a moratorium by the commission was broadened in June to include both exploratory and production natural gas wells located within the watershed.

Gas drilling companies informed leaseholders this week they would push back effective dates of agreements, which also give companies the ability to suspend annual payments to land owners.

“The money at risk here … is in the neighborhood of a quarter billion dollars,” Mr. Wynne said Wednesday. “There are people that are hanging on by their teeth and looking forward to that January (lease) payment.”

Commission officials could not be reached for comment regarding the possibility of litigation. Mr. Wynne said the $220 million figure, estimated by the alliance based on per acre payments due under the eight-year structured lease, does not include potential royalties that could be derived through natural gas production.

New York City-based Hess Corp. and Houston-based Newfield Exploration Company jointly acquired approximately 100,000 acres in northern Wayne County last year and hoped to begin capitalizing on it this year by drilling a slew of exploratory wells in search of viable natural gas more than a mile beneath the county’s surface.

Six exploratory wells evaded the June 14 deadline enacted by the federal-state represented commission which has jurisdiction over water resources nearly all of Wayne County. The companies had received approval for the six wells from the state Department of Environmental Protection prior to that date.

Both environmental regulatory agencies have jurisdiction over natural gas drilling in the state’s portion of the 13,539-square-mile watershed.

However, the river basin commission placed a blanket moratorium on natural gas drilling within the watershed area until it develops its own regulations pertaining to the industry – a process that could take at least 6 months to a year.

Unlike other areas experiencing extensive Marcellus Shale development throughout the state, Wayne County does not have a single producing well.

Meanwhile, company officials informed the nearly 1,300 property owners in the alliance this week they will extend the eight-year term of the exploratory and development lease due to the commission halting its natural gas development strategy in Wayne County.

The companies also can suspend its $400 per acre payment due to landowners next year, and future annual payments as well, according to a clause in the lease agreement that can be exercised if a regulatory agency interferes with natural gas development.

Newfield spokesman Keith Schmidt said landowners will receive next year’s payment, but the letter sent to landowners does not state that four annual payments following that, during the development phase of the lease, will be issued.

“Our primary goal is to develop a long-term business … in Wayne County,” Mr. Schmidt said. “The payments will be made on the scheduled time frames.”

Newfield will also drill five of the six exploratory wells permitted in Wayne County as it awaits the development of natural gas regulations by the commission and the lifting of moratorium it imposed, he added.

Contact the writer: smcconnell@timesshamrock.com

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Copyright:  The Scranton Times

By Patrick Sweet (Staff Writer)
Published: June 15, 2010

NOXEN – Chief Oil and Gas may begin construction on a natural gas well just a few miles north of the border between Luzerne and Wyoming counties as soon as the second week of July.

Off Route 29 in Noxen, short stakes mark the future location of the drilling pad on Robert Longmore’s 97-acre farm. The state Department of Environmental Protection is currently reviewing the Texas-based gas company’s permit to place and operate a well it filed May 11.

The farm is near properties that are part of the Noxen Area Gas Group, a body of roughly 150 families with a combined 8,500 acres which is in the midst of negotiating a lease with Houston, Texas-based Carrizo Oil and Gas.

Just down the road from Longmore, Noxen group organizer Joel Field verified that the group is in the final stages of negotiation with Carrizo. Field and co-organizer Harry Traver declined further comment due to the sensitivity of the negotiations.

“Until things are settled down, they’d rather not give any statements,” Harry Traver’s wife, Dawn Traver, said Monday.

Longmore, 56, has owned the farm since 1998 and signed a lease with Chief roughly four and a half years ago. The landmen who approached Longmore about the deal, he said, made the three-page lease giving his family $25 per acre with the minimum 12.5 percent royalty sound like a good deal.

“We were kind of taken advantage of four and a half years ago,” Longmore said. “I know people getting $6,000 an acre.”

The lease had almost no provisions protecting Longmore’s farm. At the time, the landmen made it seem unlikely that drilling would ever commence during the terms of his lease, which ends May 15, 2011.

Chief Oil and Gas media contact Ben McCue attempted to reach operations employees for comment Monday afternoon but they were unavailable by press time.

Since Longmore signed, though, he said his experience with the company has been much more positive.

Earlier this year, the Longmores were given the opportunity to amend the lease.

“They proposed some amendments to the lease,” Longmore said, “so we countered with some amendments with some environmental stuff.”

Chief offered to reopen the terms of the lease in order to add protections for the company in anticipation of a Pennsylvania Supreme Court decision that could have invalidated thousands of gas leases where gas companies were deducting production costs from the state minimum royalty.

The opinion on the case was an interpretation of the Pennsylvania’s Minimum Royalty Act which establishes the 12.5 percent royalty requirement for all oil or natural gas recovered from a well but doesn’t stipulate when to calculate the royalty.

The court ultimately decided in favor of the gas companies roughly a week after the Longmores and Chief finalized the revised lease.

The Longmores added amendments that protected ground and surface water, along with the 0.25-mile stretch of Bowmans Creek that runs through the property.

Longmore’s son, Josh Longmore, manages the Luzerne County Conservation District and helped his father amend the lease.

“Unfortunately, they signed a very basic lease that didn’t have some of the protections that the newer leases have,” Josh Longmore said. “Our biggest goal, our biggest hope is that the property maintains its natural beauty, its agricultural purpose.”

The younger Longmore doesn’t have any stake in his parents’ farm, but felt that it was necessary to help. He and his father combed through leases that they found online and pulled out the clauses that fit their needs.

“There was like three or four different categories of amendments,” Longmore said.

Chief accepted 90 percent of their roughly 20 amendments, Longmore said.

The company did draw the line on an amendment that would have prohibited the company from disposing cuttings – the rock equivalent to sawdust – on the pad. The company argued it would be cost-prohibitive to haul it off-site, Longmore said.

“I really got the impression that they weren’t hiding anything from us,” Longmore said. “They were willing to answer every question we had.”

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Copyright: The Citizens Voice

By Steve McConnell (Staff writer)
Published: June 10, 2010

With an eye set toward growing Marcellus Shale natural gas extraction in the region and throughout Appalachia, a Texas company will expand capacity of an existing natural gas transmission pipeline that crosses beneath Susquehanna and Wayne counties beginning this month.

Dubbed the “300 Line Project,” El Paso Corp. will lay 128 miles of new natural gas transmission pipeline – parallel to an existing line across the state’s northern tier – that will include approximately 18 miles of new pipeline in Wayne County. There also will be sections built in Susquehanna and Bradford counties, also within existing rights of way.

Following permit approval by the Federal Energy Regulatory Commission last month, the company anticipates constructing a natural gas compression station in Susquehanna County this month as part of the project and will begin pipeline construction in Wayne County early next year, said company spokesman Robert Newberry.

Mr. Newberry said the project will create an estimated 400 temporary construction-related jobs in the region. “We generally use local workers,” he said.

The company filed its initial permit request with the federal agency, which is charged with the oversight of interstate pipelines transporting energy commodities, in October 2008.

An estimated total project cost was not available Wednesday.

The project will enhance the company’s Tennessee Gas Pipeline, part of a network of transmission pipelines extending to the Gulf of Mexico. It will expand natural gas transmission capacity for the overall network and better service growing demand in major metropolitan markets including New York City, according to the company.

In Wayne County, a new 30-inch natural gas transmission pipeline will be placed generally within the rights of way of the company’s existing 24-inch pipeline that was constructed in 1955, said county planning director Ed Coar.

The existing pipeline runs beneath Berlin, Clinton, Dyberry and Mount Pleasant townships, and Bethany and Honesdale boroughs in Wayne County, Mr. Coar said.

The entire pipeline expansion is projected to be in-service by November 2011 with the majority of the construction work in Wayne County occurring throughout 2011, Mr. Newberry said.

“We’ve come pretty close to those in-service dates,” he said.

In addition to this project, Wayne County is entering the early stages of Marcellus Shale natural gas development with up to 14 exploratory wells expected to be drilled this year by New York-City based Hess Corp. and Houston-based Newfield Exploration Co. in a joint partnership.

El Paso Corp. owns the largest interstate natural gas pipeline system in the U.S., according to the company.

Contact the writer: smcconnell@timesshamrock.com

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Copyright: The Scranton Times-Tribune

VICKI SMITH Associated Press Writer
Published: June 7, 2010

MORGANTOWN, W.Va. (AP) — A crew drilling a natural gas well through an abandoned coal mine in West Virginia’s Northern Panhandle hit a pocket of methane gas that ignited, triggering an explosion that burned seven workers, state and company officials said Monday.

The blast created a column of flame that was initially at least 70 feet high, but the rig operator said the site was secure and the fire was about 40 feet high by late morning.

A team from Texas-based Wild Well Control, a company that specializes in rig fires, will decide whether to let the methane burn or try to extinguish the flames, said Kristi Gittins of Dallas,Texas-based Chief Oil and Natural Gas.

The explosion occurred about 1:30 a.m. in a rural area outside Moundsville, about 55 miles southwest of Pittsburgh, and presents no danger to any structures or people, said Bill Hendershot, an inspector with the state Department of Environmental Protection’s Office of Oil and Gas.

The operation was less than a week old: DEP records show a permit was issued June 2 to AB Resources PA LLC of Brecksville, Ohio.

Gittins said AB Resources is the operator of the well, while Chief has a “participation interest.” It is Chief’s responsibility to drill and complete the well, she said.

Chief’s site contractor, Union Drilling of Buckhannon, had drilled the first 1,000 feet of a second well on the property and was preparing to install surface casing when crews apparently hit and ignited the methane, she said.

Crews had drilled through the abandoned Consol Energy mine before without incident, she said.

Methane is a known risk when working near old mines, and the company typically takes a variety of precautions, including venting systems. Gittins could not immediately say what precautions were in place at this site.

“Luckily, our response team got there quickly, secured the area and evacuated the workers,” she said. “From all appearances, there weren’t any life-threatening injuries, so that’s a good thing.”

The seven workers were taken the West Penn Burn Center in Pittsburgh and were in fair condition, a hospital spokeswoman said.

Five were employed by Union and two worked for BJ Services Co. of Houston, Texas, said Jeff Funke, area director of the Occupational Safety and Health Administration’s Charleston office.

A spokesman for Union in Fort Worth, Texas, did not immediately return a telephone message.

The BJ Services workers were among four that had just arrived on site to place the casing, said Gary Flaharty, a spokesman for the parent company, Baker Hughes Inc. of Houston. The crew runs a safety check at the start of each shift and was just preparing to do that when the blast occurred.

Flaharty could not provide any details about the injured employees but said they’re being treated for burns and are expected to survive.

Funke said OSHA learned of the accident shortly after 8 a.m., and two investigators were being dispatched. However, they cannot enter the site and begin work until the fire is out, he said.

OSHA created a program to deal with gas drilling in the vast Marcellus shale fields about five years ago and has been proactively inspecting sites to ensure compliance with safety regulations, he said. The gas reserve is about the size of Greece and lies more than a mile beneath New York, Pennsylvania, West Virginia and Ohio.

OSHA knew there would be a lot of drilling in West Virginia and Pennsylvania, “and we did our best to get out in front of that curve,” Funke said. “So we’re well-equipped to respond to this.”

About 98 percent of the region’s drilling now involves Marcellus shale, he said.

Gittins, the spokeswoman for Chief, confirmed the company was tapping into the Marcellus reserves. The company has drilled about 75 Marcellus wells in West Virginia and Pennsylvania so far, she said, with about 15 of them in West Virginia.

This was the company’s first major accident, she said.

However, it’s the latest in a string of accidents related to the rapidly growing pursuit of Marcellus gas.

In Pennsylvania, environmental regulators are investigating what caused another well to spew explosive gas and polluted water for about 16 hours last week until it was brought under control.

A crew of eight was evacuated from the Clearfield County site Thursday, but no one was injured. That accident involved EOG Resources Inc. of Houston.

Copyright:  The Scranton Times-Tribune

By David Falchek (Staff Writer)
Published: May 8, 2010

When Laurie and Brian Kaszuba of Dickson City received a $16,000 offer from a pipeline company to run a natural gas pipeline through their Great Bend property, they didn’t see it as a windfall.

Having a natural gas line three feet below the surface with a right of way on the surface would have made it more difficult to build their retirement home or subdivide the land. So they turned it down.

If pipeline companies eyeing the Marcellus Shale region have their way, property owners likely won’t have that option.

Laser Marcellus Gathering LLC of Houston has applied to the Public Utility Commission to be declared a utility in Pennsylvania, a designation that would give the company the power to condemn any property it needs and to use eminent domain to obtain easements for pipelines.

The company is planning to build a 30-mile pipeline, costing about $37 million, to connect gas wells in western Susquehanna County and New York with the interstate Millennium pipeline that runs across New York state’s southern tier.

The outcome of the request before the PUC could change the way easements are negotiated. With the Marcellus gas rush well under way and millions of state acres leased by gas exploration companies, pipeline easements are the new wave of legalese to arrive in mailboxes throughout the Marcellus region. Susquehanna County, a hot-spot for shale gas, is destined to host an underground web of pipes from every wellhead.

Unlike natural gas exploration companies, so-called “midstream” companies that gather gas have the option of becoming utilities. Several midstream companies have filed motions supporting Laser’s bid. While being treated as a utility exposes pipeline companies to a new layer of regulation, it also gives them a valuable tool that tilts negotiations with property owners in their direction, said Stephen W. Saunders, a Scranton environmental attorney.

“The company would be able to say ‘negotiate with us or we’ll just take your property through condemnation,’” Mr. Saunders said. “There’s no requirement for a utility to negotiate at all. Eminent domain is a nice tool for a company to have in its back pocket.”

Still, many utilities negotiate in good faith with property owners to acquire the property outright or obtain easements. If negotiations fail, the utility may condemn the land and the matter goes to a board of view, a quasi-judicial panel of real estate experts who determine the fair market value of the property. Chip Berthelot, president of Laser Midstream, Laser Marcellus’ parent company, said eminent domain is not the “overriding factor” in the company’s pursuit of utility status. “We don’t like to use condemnation and we do everything in our power to avoid that sort of confrontation with property owners,” he said. The utility designation, he said, would require his company to serve any customer, rather than being tied to one.

Meanwhile, property owners are groping their way through another type of agreement related to the acquisition of easement rights.

At most well development sites in other states, there also is right-of-way leasing, said David Messersmith, part of Penn State Cooperative Extension’s Marcellus Shale Team, which is providing information to the public about the industry.

Mr. Messersmith expressed a concern about that type of arrangement. “People aren’t up to speed on the terms and the language of these things,” Mr. Messersmith said.

A company may calculate their offer based on linear foot, by rod (16.5 feet), or by square footage, making it difficult for property owners to compare offers or determine a true market value. Rights of way could be anywhere from 8 to 30 feet off center. They limit landowners’ activity on a significant swath of property for a lifetime or more, Mr. Messersmith said.

Some companies are blanketing the area with lease offers hoping to trade or sell rights of way in the future.

Laser is further along in its plans. While young, the company has an experienced management team and operates more than 80 gathering systems in Texas, Louisiana and Arkansas. “We are excited about participating in the development of the Marcellus region,” Mr. Berthelot said.

The Kaszubas challenged Laser Marcellus’ request before the PUC, but withdrew their objection when the pipeline path was rerouted around their property. They leased their mineral rights and they want to see the Marcellus region developed. But they don’t trust the condemnation process.

“Under eminent domain, it doesn’t matter what the property owner says or feels,” Mr. Kaszuba said. “People shouldn’t be forced to have something on their property they don’t want – at any price.”

Proposed line

Copyright:  The Times-Tribune

The twelve personal injury attorneys at Dougherty Leventhal and Price LLP are handling serious personal injury and workers compensation cases in North Central Pennsylvania. The Law Firm includes six (6) Super Lawyers as voted by Philadelphia Magazine and is representing accident victims in Bradford, Susquehanna, Tioga, Potter, Wyoming. Sullivan and Wayne County. DLP has handled numerous serious injury cases involving tractor trailers, cars, motorcycles, defective products and other types of negligence. Recently, Attorneys Joe Price and Tom Cummings attended a seminar in Houston , Texas to help the firm represent clients injured or killed while involved in the drilling industry or when involved with a vehicle used in the gas drilling industry. The firm has represented clients from many communities including Wellsboro, Coudersport, Mansfield, Towanda, Athens, Waverly. Montrose, Sayre, Tunkhannock and other towns. If you suffer injuries as a result of an accident or while at work, please contact any of our lawyers at dlplaw.com or call 570-call-dlp.

In light of the ever-growing presence of well drilling activity in the Marcellus Shale formation, Attorneys Joseph Price and Thomas Cummings of the DLP law firm recently received accreditation after attending a comprehensive continuing legal education course in Houston, Texas presented through the Oil, Gas and Energy Resources Law Section of the State Bar of Texas.
The substantive portions of the course materials included and overview of the applicable State and Federal regulations that cover jurisdiction over roads, traffic, noise, odors, leases, permits, pipeline easements and royalty payments. In addition, the program addressed the legal obligations of property owners (the “surface owner”) and well drilling operators in the event of a well drilling work accident, damage to the surface owners property, damage to adjacent owner’s property, or personal injury suffered as a result of a well drilling operation.
The course program, as offered by the University of Texas School of Law, provided instruction in problem areas that develop in the areas of oil, gas and mineral law. Course presenters included law professors, as well as private counsel and corporate attorneys who practice in the natural gas and oil drilling litigation field.