NYMEX Natural Gas Price $2.62 (9/29/15)

Stone Energy Curtails Nearly All Appalachian Production on Low Prices

From an Article by Jamison Cocklin,  NGI News, September 26, 2015

Stone Energy Corp. has shut-in its largest field in the Appalachian Basin, curtailing between 100 and 110 MMcfe/d of Marcellus Shale production to offset low commodity prices and negative differentials that had reached “unacceptable levels,” the company said.

Stone said its Mary Field in West Virginia, where it holds 39,200 acres, would be shut in until further notice. That leaves the company with 25 MMcfe/d of Appalachian production still flowing in its Heather and Buddy fields — smaller positions also located in West Virginia.

The Mary Field is home to one of West Virginia’s first deep dry Utica Shale wells in Wetzel County, where Stone tested the Pribble 6HU last December at a five-day peak rate of 30 MMcf/d.

The company drilled 38 Marcellus wells in the region last year and completed 34 of them. In the second quarter, the company produced 292 MMcfe/d, of which 144 MMcfe/d was produced from its Marcellus and Utica shale positions.

Stone said stagnant oil and natural gas prices further reduced by negative basis differentials and fees for transportation, processing and gathering had reduced operating margins in the basin. The shut-ins are expected to reduce the company’s forecasted third quarter guidance from 234-246 MMcfe/d to 225-231 MMcfe. If the wells remain offline, Stone said, full-year guidance would likely be adjusted lower from the current 252-264 MMcfe/d.

Cash flow impacts are not expected to be reflected in the company’s third quarter financial results. With the Mary Field offline, Stone indicated that it would narrow its focus even more to the deepwater Gulf of Mexico (GOM), which was already anticipated to account for 88% of capital expenditures this year. The company said those assets are yielding higher margins.

Stone’s deepwater drilling rig has completed scheduled maintenance and would resume operations in the coming days under the company’s current plans. It intends to mobilize that rig to finish completion of the company’s Amethyst discovery, in which it has a 100% working interest, before it moves on to drill three other GOM development prospects

While Amethyst is expected to begin producing in 1Q2016, the Vernaccia exploration well, which is being operated by Italy’s Eni SpA, is expected to be spud next month. Stone has a 22% working interest in that deepwater well.

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US Horizontal Rig Count Down 7% in Five (5) Weeks

From a Report by Alex Chamberlin, marketrealist.com, September 26, 2015

According to the Baker-Hughes oil services company, the US horizontal rig count decreased by 11 rigs in the week ending September 25th as part of 5 consecutive weekly drops.  In those last five weeks, 48 rigs (7%) have been taken off-line.

And, in the past 12 months, some 718 (54%) of the horizontal drilling rigs have been shut down. These rigs peaked at 1372 in November of last year and the operational count is now at 629.

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Inside Shale, WAJR, 1440 Radio, Morgantown, WV

Note: It was announced today that of the 20 drilling rigs of Antero Resources operating in West Virginia, some five (5) are currently operating. (Antero Resources has been very active in Doddridge and Tyler counties here in West Virginia.)

< The NYMEX price for natural gas currently stands at $2.62 >

See also: www.FrackCheckWV.net

Marcellus drilling & fracking leading to LNG exports?

Stone Energy to pay $177,500 in EPA deal

From an Article by Ken Ward Jr., Charleston Gazette, November 4, 2014

A Louisiana company [with offices and operations in West Virginia] will pay $177,500 to resolve environmental violations cited by the U.S. Environmental Protection Agency at two natural gas operations in West Virginia, the EPA has announced.

Stone Energy Corp. agreed to the penalty settlement after EPA had cited the company for Clean Water Act violations that occurred during construction of two Marcellus Shale well pads and access roads.

EPA said that the company filled in about 680 feet of tributaries of Fishing Creek at the Weekley Well Pad and 420 feet of Duerrs Run and an associated tributary at the Maury Well Pad, in both instances without first obtaining a “dredge-and-fill” permit from the federal Army Corps of Engineers.

“Stone’s failure to apply for and receive a permit from the U.S. Army Corps of Engineers before dredged or fill material, such as dirt or stone, was discharged into the waterways resulted in the violation,” EPA said in a press release. “This permit requirement protects important aquatic resources, and preserves their environmental, recreational, and economic functions, including flood control, water filtration, and wildlife habitat.”

In a disclosure filed with the U.S. Securities and Exchange Commission, Stone Energy said that EPA had cited the company in November 2012 and March 2013 for actions at those two locations after inspection three of Stone’s operations. Stone said it accepted EPA’s settlement offer in June 2014. The SEC filing did not explain what happened with the third site inspected by EPA.

Two other instances of unpermitted discharges in the oil and gas industry — involving Chesapeake Energy and TransEnergy — have prompted federal criminal pleas by companies. David McLeon, special agent in charge of EPA’s regional criminal division, said that his office was not involved in the Stone Energy matters covered by the agency’s civil settlement.

Last year, Stone Energy agreed to pay a $284,000 penalty in a deal with the state Department of Environmental Protection over an incident at a drilling site in the Wetzel Lewis Wildlife Management Area, where what the company described as a “slope failure” sent soil and debris into area streams.

Mom's Driveway Under Attack

Mom’s Driveway: Just another “minor project” in the Wetzel Marcellus gas field

From Bill Hughes, Wetzel County Resident, May 5, 2014

I was recently asked to watch over a parcel of property by the son of an elderly woman. Stone Energy has a very active footprint nearby and he was concerned that his Mom’s driveway access and the mailboxes and everything nearby would be disrupted, blocked, damaged, etc.

Parts of the problem situation described and shown above and below have existed for over two years. I have not tried to get anyone to focus on this since up till now it has been a lesser problem when compared to some of the erosion and sedimentation issues of the ongoing natural gas operations in our region.

However in the past few months there has been a very large increase in traffic, both small and larger heavy equipment operating in and thru the unprotected stream bed. It seems that there are preparations for a well pad in progress up the hill. I have been told that in the future a bridge might be built. The standard solution seems to be just to dump more limestone and keep on trucking.

The traffic across Little Fishing Creek here has included, among others: Dump trucks; track hoes, ukes (articulated dumps) rollers, service trucks; utility trucks, pickup trucks; employees pickups; water-withdrawal pump tender’s pickups; diesel fuel delivery trucks; etc.

The water storage pond on the Conley property can be seen on Google Earth. It has been and is part of Stone Energy’s central water management system. All the earth moving equipment to construct the pond was brought up by way of the Little Fishing stream crossing shown in these pictures.

Trucks have been driving thru the creek here at low flow or high flows, without regard for the weather conditions. Larger equipment has been moved thru the steam bed in this unprotected stream crossing. There are no culverts or pipes. In addition to the mechanical service vehicle driving thru the graveled stream bed, a large Sheepfoot’s roller was also driven thru the stream bed.

For a few years, piles of limestone have been regularly stored at the banks of the stream in order to be conveniently placed into the stream bed as often as needed to keep the stream bed passable for the gas industry service vehicles. Dozers and other earth moving equipment would frequently cross thru as needed.

When it comes to industrial activities involving stream crossings of heavy equipment, large trucks, limestone fill materials, and multiple crossings per day, I believe that a bridge needs to be built FIRST—then comes the road improvements, the ponds, laydown areas, and support equipment  for the well pad (s).  Can Mom use her driveway as she normally did?  And, what about the residents that have years of tranquil living in these (and our other) locations throughout the Marcellus region?

Little Fishing Creek & Impacting Roller