Monday, May 25, 2009

Optimism Over The Marcellus Shale

In these difficult times, it is encouraging to read some positive economic news. Here we have an example of people doing what Americans do best, using creativity, new technology, and persistance to produce a valuable product where none existed before.

In this case, people are producing large amounts of natural gas from a thick and widespread layer of rock called the Marcellus Shale in the northeastern United States. The Marcellus Shale has been known for over 100 years to contain gas, but it is only recently that operators have found a way to coax this gas out of the ground in enough volume to be of interest. And it is attracting a lot of interest. Search this blog for many more articles about the Marcellus Shale and how it is being developed.

Marcellus Shale results have National Fuel happy


National Fuel Gas Co. executives said they are encouraged by the early results from a new well that the company and its joint venture partner drilled in a potentially lucrative region of Pennsylvania.

The new well, drilled as part of its joint venture with EOG Resources, is producing more than 3 million cubic feet of natural gas a day in its early days of production, National Fuel executives said.

That production rate is nearly nine times the initial production rate of the joint venture’s first well, which was drilled last year and yielded a disappointing gas flow because of an inefficient job fracturing the rock to release the gas.

In all, the joint venture has drilled and completed initial tests on four wells on land it controls in the Marcellus Shale in Pennsylvania. The latest well’s initial production is double the highest initial yield of any of the three other wells the joint venture has drilled.

“This flow test confirms our expectations for the potential of our Marcellus Shale position,” said Matthew D. Cabell, who runs National Fuel’s oil and natural gas drilling business.

National Fuel has drilling rights on 720,000 acres of land in northwestern Pennsylvania that covers the Marcellus Shale, a geological formation that many experts believe holds vast amounts of natural gas. That gas previously went untapped, until the launch of new drilling techniques that allow the well to be drilled vertically and then horizontally, unlike a traditional well that goes straight down.

Within two years, National Fuel believes the high-yielding Marcellus wells could produce between 30 million and 40 million cubic feet of gas per day. The joint venture is completing work on two other wells. National Fuel’s own drilling program in the region calls for 10 vertical wells and two to three horizontal wells to be drilled this year.

National Fuel also spending up to $30 million build a small-scale pipeline system that will run for about 30 miles through in Tioga and Lycoming counties in Pennsylvania to gather the gas produced at the new Marcellus wells and bring it to nearby higher-capacity pipelines that can access major U. S. markets.

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