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Geology News
Fayetteville Shale Current Events

The American Petroleum Institute has a video that explains the horizontal drilling and hydraulic fracturing processes. It explains the drilling, fracturing, equipment, materials and environmental concerns.

This is an excellent video from an authoritative source.

A few years ago a number of LNG (liquefied natural gas) terminals were being planned to bring foreign natural gas into US markets. Then natural gas drillers began tapping shale reservoirs such as the Haynesville of Louisiana, the Barnett of Texas and the Marcellus of the Appalachian basin. The US natural gas and energy situations have been changed.

“Colorado School of Mines has announced the establishment of the Unconventional Natural Gas Institute (UNGI) for the upstream research and development of natural gas, which is clean-burning, helps minimize greenhouse gas emissions, and is in great supply in the United States.” Quoted from the Colorado School of Mines announcement.

An interesting article at the Financial Times website explores the topic of foreign companies investing in United States natural gas. Billion dollar investments have occurred in which foreign companies have bought major interests in the emerging shale gas plays.

The United States Department of Energy funded nine natural gas from shale projects. Most of them are intended to improve the management of hydraulic fracturing water at shale drilling sites or waste water treatment sites.

The amount of natural gas in storage has skyrocketed above the historic five year range. There is a lot of new gas entering the market and stocks are 517 billion cubic feet above the 5-year range.

The Energy Information Administration’s estimated average wellhead price for natural gas per Mcf for the past several months….

$4.16 February
$3.72 March
$3.43 April
$3.45 May
$3.45 June
$3.43 July

Natural gas producers have developed such a large production capacity and a deep resource base that the market now has an enormous overhang of natural gas that could take years to work off.

In a recent news release from Chesapeake Energy, data was provided on their expected yield for wells in the various shale plays. They expect the total yield from their Haynesville wells to be 6.5 bcfe, Fayetteville 2.4 bcfe, and Marcellus wells to yield 4.2 bcfe. These numbers might increase as technology improves.

The natural gas supply situation of the United States has improved with a rise in reserves of about 35% between 2006 and 2008. Unconventional gas from shale accounts for most of the increase.

A blog post on the Wall Street Journal website speculates on why the number of active rigs is up for the third week in a row.

Natural gas is under $4 per million BTU, down from a high of $13 one year ago. The Houston Chronicle has an article that reports on natural gas producers cutting their output in an effort to cut the supply of natural gas and thus increase prices.

Two members of Congress are working on a bill that would give the federal government regulatory authority over hydraulic fracturing. They are motivated by a concern for ground water protection. Drillers are concerned that new federal regulations will cause permitting delays and increased costs.

A group of gas drillers in Arkansas is attempting to sue the Arkansas Department of Environmental Quality over permitting methods for wastewater handling at drill sites over the Fayetteville Gas Play.

Mineralweb.com has a lot of short articles and links to resources related to mineral rights, oil and gas leasing, royalties, taxes and more.

“The U.S. Department of Energy (DOE) announces the release of Modern Shale Gas Development in the United States: A Primer. The Primer provides regulators, policy makers, and the public with an objective source of information on the technology advances and challenges that accompany deep shale gas development.” Quoted from fossil.energy.gov.

A news release by the Ziff Energy Group says that the unconventional gas plays now active across North America will account for 53% of the continent’s gas production by 2020.

The New Alternative Transportation to Give Americans Solutions Act of 2009 is a bill introduced on April 1st to promote the use of natural gas as a transportation fuel. It has provisions for natural gas vehicle production and installation of refueling equipment. This is great news for many parts of the country where new shale gas plays are developing, it will reduce our dependence on foreign oil, keep fuel dollars in the United States and result in fewer vehicle emissions. (Text of the Bill.)

Seven new, large LNG plants being completed overseas could bring a glut of natural gas to United States markets. Some believe that these deliveries will not only depress the price of natural gas but they will also hamper the development of domestic natural gas plays such as the Haynesville, Fayetteville and Marcellus.

One of the biggest issues that environmentalists have with hydraulic fracturing is that the companies who use it have not been required to reveal the chemical additives. A bill introduced in Congress by Diana DeGette of Colorado would require companies to disclose drill site chemicals and subject them to the Clean Water Act.

News about Marcellus Shale.

An article at The Oil Drum explores how tight credit and a rapid drop in natural gas prices have put the brakes on leasing and drilling activity and the United States gas plays.

News about Fayetteville Shale.

According to the New York Attorney General’s Office, natural gas lease agreements can include more variables than royalty rates and signing bonus amounts. Land owners can ask for almost anything in their lease agreement.

Once when I was buying a house I requested a variation from the standard contract offered by the real estate agent. The agent said that it was not possible so I asked her to call my attorney. My attorney told her that Mr. King can write… “Seller will jump in a lake” into the contract… and the seller can decide if he wants to do it.

The Arkansas Geological Survey (formerly the Arkansas Geological Commission) has a new website. Information on their site that should be of interest to many Geology.com visitors include: Fayetteville Shale Gas Play, Arkansas Pipeline Map, Minerals Leasing Manual and information about Arkansas minerals.

Chesapeake Energy is one of the leading companies drilling the organic shale deposits for Natural Gas in several basins across the United States. They recently announced plans to cut their rig count and capital expenditures. The recent sharp decline in natural gas prices has changed the economics of their business model.

BP America is buying a 25% stake in the Fayetteville Shale holdings of Chesapeake Energy in Arkansas for $1.9 billion. The Fayetteville Shale is a deep natural gas-bearing rock unit that has recently been made productive by the technologies of horizontal drilling and hydraulic fracturing.

More on the geology of the Fayetteville Shale. Fayetteville Shale news.

United States natural gas production is on a new rise after many years of steady decline. The newly tapped plays such as the Barnett, Haynesville and Marcellus have the promise of replacing a lot of oil that otherwise would have been imported.

Lots of people are being asked to sell the minerals beneath their property or sign a contract that gives a drilling company the right to explore their property for oil and natural gas. This article explores many aspects of mineral rights, and attempts to inform the potential seller/lessor that the transactions and agreements can be very complex and that advice from an expert is a good idea.

China National Petroleum Corporation is considering to take minority ownership stakes in some of the Marcellus Shale and Fayetteville Shale properties that will be offered by Chesapeake Energy.

More information on Marcellus Shale.

Lots of people have leased their acreage for potential gas drilling and are curious about how much their royalties might amount to. We now have a tool to estimate gas royalty income based upon a few assumptions. You just type in your royalty rate, an assumed natural gas wellhead price, an assumed well production rate, the number of acres in the production unit and the number of production unit acres that belong to you – then push a button.

Most of the leasing and drilling in the United States gas shale plays have been done by smaller independent companies, but now some of the international oil companies are starting to buy in. BP just purchased $1.75 billion of unconventional shale assets from Chesapeake Energy.

More info on gas shales: Marcellus, Haynesville, Fayetteville, Barnett.