Gas Permit Applications Flat in Mon
DEP denied the one filed since February
Morgantown Dominion Post
19 September 2012
By David Beard
Monongalia County continues to see a lull in horizontal gas well
permitting, though neighboring Preston and Marion counties have
continued to see growth since The Dominion Post’s last report, in
Increased production may be on the horizon, one industry official
Since February, there has been only one new application for a
horizontal Marcellus well: Chesapeake Appalachia’s Willard Simpson
Mon 8H. The Department of Environmental Protection (DEP) received
the application in March and denied it in May.
This is the only permit denial recorded on the Marcellus lists for
the three counties. DEP officials weren’t available late Tuesday
afternoon to comment. Chesapeake said the denial letter would be
on file at the DEP, but noted there were problems with the access
The DEP has 15 other Mon County permits on file. Chesapeake’s
other most recent pending application, for the Leslie Keaton Mon
3H, to be sited south of Goshen Road, was returned to the company
in June for further work.
During this period, Chesapeake completed work on three wells and
put them into production: Reliance Minerals 3H, south of the
Keaton site, completion reported in March; and Esther Clark 1H and
3H, near the Mon-Wetzel border, both reported last week.
In February, Preston County had 40 active permits with four more
pending. As of Tuesday, the DEP shows 52 records on file, all in
the Marcellus shale, but three of them conventional vertical
wells. Four of those are pending — all by Canada-based Enerplus
Enerplus had two other permits approved, one in late February, one
in August; three returned for more work, all in June; and one
reported complete, also in June.
Chesapeake had two permits approved in May and three others
reported complete — two in March, one in August.
Texas-based Chief Oil & Gas canceled one permit application in
February, but had site reclamation of two wells on its Grimm
Lumber pad approved in July.
Texas-based Novus Operating Co. reported two wells — one of them
vertical — approved in July.
February’s report showed 75 permits on file in Marion County with
three more pending. As of Tuesday, DEP showed 95 records on file.
St. Marys-based Trans Energy has one application pending. Two were
approved since last report, and one was returned for more work.
Exxon subsidiary XTO had nine permits OK’d and reported six
complete. It withdrew one application.
Chesapeake had two permits approved and reported six complete —
with site reclamation on five wells OK’d.
Glenvillebased Waco Oil & Gas reported four permits complete —
all on its Donna pad in Plum Run, Marion County. This pad has been
the subject of several reports in The Dominion Post: It lies
immediately adjacent to the home of Stacie and Casey Griffith, who
have recounted the struggles of having a dream home turn into an
industrial site. Three of the Donna wells appear twice on the
Marion list because Waco bought the land from the original owner.
Pittsburgh-based EQT reported two wells complete with reclamation
of one site OK’d.
Low gas prices affecting production
Gas industry officials have attributed the slow activity in this
area chiefly to low natural gas prices. They plunged from a fall
2007 peak above $10 per mcf (thousand cubic feet) to about $5
through fall 2010, then continued a steady decline, according to
the industry sites themarcellusshale.com and theuticashale.com.
The mcf price fell from $4 a year ago to below $2 in May, then
climbed a bit and as of Tuesday stood at $2.77.
At this price, many operators find the return on investment for
“dry” gas, mostly methane used for heat and power, too low. Dry
gas lies under this area.
Some companies, such as Chesapeake, have been turning their
attention to the “wet” gas — also containing ethane, propane,
butane and oil — west and north of here in the Marcellus and
deeper Utica formations. The additional products produce
additional revenue for the operators.
But Corky DeMarco, West Virginia Oil and Natural Gas Association
executive director, offered an optimistic outlook. Some are
forecasting prices back in the $4 range in 2013, “which would stir
production again, not only in the wet gas area but the dry gas
Some of that forecast is predicated on this winter being tougher
than last — when a supply glut and low demand sent prices
plummeting, he said.
And in the longer view, DeMarco said, a hoped-for proliferation of
natural gas vehicles — encouraged by the likes of West Virginia’s
governor and other regional leaders — and the possibility of
exporting liquified natural gas to Europe and Asia could help
further drive demand and price.