Well Deal Sealed: Rig Going Up Near The Highlands Early Next Year

WHEELING – After months of leasing land for natural gas exploration, it appears Chesapeake Energy is preparing to construct Ohio County’s first horizontal Marcellus Shale well site early next year near The Highlands.

That means the county could start cashing in on the 18.75 percent royalties for which Ohio County commissioners signed because the well site is on a piece of privately owned property on the south side of Interstate 70, near The Highlands.

County officials also signed for lease payments of $3,600 per acre on about 2,180 acres of land, bringing $7.85 million from Chesapeake already. County Administrator Greg Stewart believes the real revenue will probably be in the royalty payments.

“We told Chesapeake that we did not want any wells on any of our developed property at The Highlands,” said Stewart. “This plan should work for us.”

Drilling Plans

The tentative plan, as Stewart understands it, is for Chesapeake to drill about 8,000 feet deep into the Earth on the piece of private property, south of I-70. The company will then turn the well horizontally toward The Highlands on the north side of I-70 to drain gas from the county’s land, Stewart said.

Information provided by Chesapeake spokeswoman Stacey Brodak, while getting nowhere near as specific, noted, “Chesapeake Energy’s drilling schedule is very dynamic and driven by many factors so it is difficult to forecast with any certainty a date for drilling. However at the current time and as subject to change, the Highlands property which will be referred to as the Gantzer well is scheduled for development early 2011.”

“Chesapeake drives the timeline – they have the say now,” Stewart said.

According to the West Virginia Department of Environmental Protection’s Office of Oil and Gas, plat and casing plans for the well site were approved on July 30. The department issued a permit for the site on Aug. 18.

Stewart said those traveling west on I-70 may be able to see the very top of a drilling rig off in the distance, but said those exploring The Highlands should not notice any disruptions.

“No one shopping at The Highlands should be disturbed by this in any way,” he said, noting the drilling site would be inaccessible to the public.

The horizontal portion of the well will cross underneath I-70, nearly 1 1/2 miles deep in the Earth. Phone messages left at the West Virginia Division of Highways regarding the plan to drill horizontally under I-70 were not immediately returned.

Environmental Issues

While the Marcellus well set for construction near The Highlands would be the first for Ohio County, those living in Marshall, Wetzel and Tyler counties are quite familiar with the process. Some residents have expressed concerns regarding possible water and air pollution, though the West Virginia Department of Environmental Protection has yet to confirm that Marcellus drilling causes such problems.

Stewart said the county believes in the DEP’s ability to regulate the drilling.

“We have to rely on the permit process,” he said. “We feel very good about dealing with Chesapeake. They seem to be a very conscientious company.”

Chesapeake must also find a way to deal with the briny wastewater left over from the hydraulic fracturing process. Upon fracturing the rock, some of the water – 15 to 40 percent – flushes back up through the well.

Information provided by the Marcellus Shale Coalition shows that 99.5 percent of the fracking solution consists of water and sand. The remaining compounds include: acids, glutaraldehyde, sodium chloride, dimethylformamide, borate salts, polyacrylamide, petroleum distillates, guar gum, citric acid, potassium chloride, ammonium bisulfite, sodium or potassium carbonate, ethylene glycol and isopropanol.

Ethylene glycol is a compound found in antifreeze, while dimethylformamide is used to manufacture plastics. Most of the other chemicals can be found in common household products such as swimming pool cleaner and table salt.

Safety Issues/Plans for Money

A June 7 explosion at an AB Resources Inc. well site in Marshall County injured several workers, while igniting a large fireball that burned for several days. AB Resources hired Chief Oil and Gas Co. of Wexford, Pa. to drill at the site. The blast occurred when employees from BJ Tubular Services of Houston and Union Drilling Inc. of Fort Worth, Texas – which are both contracted through Chief Oil and Gas – were attempting to drill through an abandoned coal mine.

Stewart said Ohio County Emergency Management Agency officials are working to make sure they are prepared in case anything goes wrong at the Gantzer drilling site.

“We are making plans – and holding safety training – to determine what to do if a well catches fire,” Stewart said. “We also need to make provisions for getting water up there in case of a fire because there aren’t any fire hydrants nearby.”

Stewart said the county used some of the $7.85 million in lease money to “pay down some debts” on property at The Highlands. He noted, however, it is too early to say how the county will spend its share of the royalties.

“We could use it to keep paying down our debts,” Stewart noted. “Expanding The Highlands is also a possibility.”