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7/21/2010
CIC Board of Trustees Hears Update on Marcellus Shale from DPS Penn
Meeting held at Belleview Park
 

Another company in race for drilling leases

By PAUL GIANNAMORE, Business editor

POSTED: July 21, 2010
 

STEUBENVILLE - Chesapeake Energy has joined the land rush to accumulate leases for drilling for natural gas and oil in Jefferson County.

Representatives of DPS Penn, a land acquisition firm that has partnered with Chesapeake, explained their local operations to members of the Community Improvement Corp. board during its July meeting at Belleview Park Tuesday afternoon.

Austin Copeland, district landman for DPS Penn, said most of Jefferson County is part of the Marcellus shale area, which has been subjected to heavy drilling in western New York and Southwestern Pennsylvania. He said the shale formation is found throughout Jefferson County except for a small portion of Brush Creek Township in the north.

Copeland said Chesapeake wants more than Marcellus gas here, believing it can recover oil and gas from other geologic formations at shallower depths.

"We think we can get wells producing again," he said.

Copeland said the Marcellus is more shallow in Jefferson County than in other areas.

"We will look at other formations. Chesapeake is looking to move more toward liquids so that its stock is not tied entirely to the price of natural gas," Copeland explained.

He said the more land leases it can accumulate into blocks, the quicker drilling rigs will arrive in Jefferson County. He said the company will take leases on as little as a tenth of an acre, but combines the tracts together to form sites large enough to drill on.

Lease offers are for five years with an option to renew for another five from Chesapeake, Copeland said. He explained that on a 15-acre site, there can be as many as eight wells. It takes 4.5 million gallons of liquid in the drilling of each well, and the liquid has to be treated after use. He said the liquid can be re-used and there is talk of putting treatment facilities on some well sites.

City Manager Cathy Davison said the city is working with the Ohio Environmental Protection Agency on a deal to treat Marcellus drilling liquid in the city sewage treatment plant.

Copeland said the region's pipe infrastructure will need to be updated to handle output from wells. He also said the wells are required to be at least 300 feet from any structure. Copeland said because the Jefferson County wells will be shallow and will have higher pressures than those in other areas being drilled for the natural gas trapped in the shale formation, the wells will be active for only about 10 to 15 years, compared with the expected 20 to 30-year lifespan of wells in Southwestern Pennsylvania.

DPS Penn has signed on to be a contributing member of the CIC and is one of the sponsors for the upcoming Bridge Invitational Golf Tournament, scheduled for Aug. 6 at the Steubenville Country Club, said Ed Looman, executive director of Progress Alliance. The golf tournament is a fundraiser for the operations of Progress Alliance, the public-private economic development organization that is run by the CIC board.

(Giannamore can be contacted at pgiannamore@heraldstaronline.com.)


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