Shaky U.S. economy won't benefit from natural gas expansion

As the federal government prepares to gut key programs to protect water and other natural resources through this week’s debt agreement, the Department of Energy (DOE) has announced plans to invest $12.4 million on programs to support shale gas development. Yet new analysis released by the national consumer advocacy group Food & Water Watch casts additional doubt on the viability of natural gas obtained through hydraulic fracturing. “Pipe Dreams: What the Gas Industry Doesn’t Want you to Know about Fracking and U.S. Energy Independence” shows that gas leases are not only generating less energy than once forecast, but also a significant portion of U.S. fracked gas will be exported overseas and the industry’s revenues will benefit foreign economies.

According to recent trade publication accounts, DOE will invest $1.6 million, outspending General Electric 4 to 1, on a project designed to remove radioactive material from wastewater from fracking operations in New York State. It will spend additional funds on projects to improve natural gas well performance in Colorado, Texas, California and New Mexico.

Source: Philly Burbs

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Ark. Commission Votes To Shut Down Wells

The Arkansas Oil and Gas Commission voted Wednesday to close a well that's used to dispose of natural gas fluids and ban others from being drilled in a gas-rich area north of Conway where hundreds of earthquakes have struck.

Commissioners voted 6-0 to close a disposal well between Greenbrier and Enola that's operated by Deep-Six Water Disposal Services, a subsidiary of Oklahoma City-based Hurst Oil Investments Inc., the Arkansas Democrat-Gazette reported.

The moratorium would not affect the drilling of natural gas wells, but it would change how fluids from the process are disposed.

Gas companies have tapped reserves of natural gas in the Fayetteville Shale in central Arkansas by injecting water and chemicals under high pressure to fracture the shale, a process known as fracking. Those fluids are injected into separate wells for disposal.

With a moratorium, companies would have to use trucks to get the fluids to injection wells elsewhere in Arkansas or in Oklahoma or Texas, Commission Deputy Director Shane Khoury said before Wednesday's vote.

The commission pinpointed four wells in central Arkansas that it said needed to be closed. Companies operating three of the wells agreed to close them voluntarily by Sept. 30. Deep-Six, which operates the fourth, says its disposal well doesn't cause any seismic activity, the Democrat-Gazette reported.

Source: NPR

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Permitting Delays Dampen BHP Production

Company crude oil and condensate production was down 3.8 million barrels from 2010 to 80.6 million in the year to date, a fact the company put down to the Gulf of Mexico moratorium on oil and gas drilling enacted in May 2010.

“Permitting delays in the Gulf of Mexico continue to impact our petroleum operations and the drilling of high volume production wells,” BHP said in an announcement.

But the biggest drag was lower production in the Gulf of Mexico, a slip of about 5 million barrels of oil from the Shenzi and Atlantis projects in the 2011 year to date, compared with the previous year.

While performance from its Pyrenees field was 258,000 barrels higher in the 2011 June quarter than in the previous period, it was not enough to offset additional losses incurred by planned maintenance at Bass Strait and tie-in activities at North West Shelf.

The company brought its first new well in the Gulf of Mexico, at its Shenzi field, into operation in June, following previous regulatory approvals for water injection and production well drilling, it said

“When excluding volume growth from the Fayetteville Shale acquisition, we continue to expect production to be lower in the 2012 financial year.”

The company acquired Chesapeake’s holdings in the Fayetteville shale natural gas field in Arkansas for $4.75 billion in cash in February, with the deal taking effect from 31 March.

Source: Upstream Online 

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Severence tax change could effect jobs, tax dollars

UNDATED (KTHV) -- A proposed change
to the state's severance tax-- one of the
natural gas producers say it could cost jobs
and tax dollars. 
Arkansas has two different areas where
natural gas is drilled in  the Haynesville
shale in the southern part of the state and
the Fayetteville shale in the north. 
Gas companies say those landscapes could
drastically change if that measure passes.
Energy companies say if that happens the
natural gas companies drilling these
landscapes could disappear. 

The Natural Gas Severance Tax Act of
2012  proposes the severance tax on
natural gas extracted from within the State
of Arkansas to 7 percent of the market of
the gas at the time it is extracted from the
ground.
It also eliminates various severance tax
rates from 1.25 percent to 5 percent,
replacing them with the 7 percent rate.

Source: Today's THV 

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Nat Gas Companies Moving In Different Directions in Arkansas

Oklahoma City-based Chesapeake closed on its sale of Arkansas assets to BHP Billiton, an Australian oil and gas conglomerate that acquired Chesapeake for $4.65 billion earlier this year.

Chesapeake reported a companywide loss of $205 million for its first quarter of 2011 on revenue of $1.61 billion. One year ago,Chesapeake reported first quarter profits of $732 million on revenue of $2.8 billion.


It blamed losses in its hedging division for this year's poor quarter, but the BHP deal will soften the landing. Because of its size, BHP could choose to ratchet down operations in Arkansas until market conditions in the natural gas industry improve their profit margins.

Chesapeake also disclosed a recapitalization of Frac Tech Services, LLC, raising its ownership in the drilling support services firm (with a major presence in Searcy) from 26% to 30%.


Source: Talk Business. Net


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