Virginia's Nora field due CBM, shale thrusts

April 17, 2007
Two US independents moved to equalize their interests in giant Nora gas field in western Virginia, with one pressing coalbed methane development and the other exploiting expected deeper shale gas potential.

By OGJ editors
HOUSTON, Apr. 17 -- Two US independents moved to equalize their interests in giant Nora gas field in western Virginia, with one pressing coalbed methane development and the other exploiting expected deeper shale gas potential.

Nora field, in Dickenson County, has 1,150 producing CBM wells and 450 producing tight sand gas wells and more than 300,000 acres under lease. Potential exists to drill nearly 6,000 more CBM and tight gas sand wells.

Equitable Resources Inc., Pittsburgh, and Range Resources Corp., Fort Worth, will equalize their interests in the wells, acreage, and gathering system. Range will pay Equitable and a newly formed gathering joint venture between the companies $315 million to equalize the interests.

Equitable will operate the producing wells and manage all future CBM drilling and the gathering system. Range will oversee drilling below the CBM formation, including tight gas formations, shales, and deeper formations.

The coals lie at 1,100-2,500 ft. Tight gas sands are at 4,000-5,000 ft and Devonian shale at 5,000-6,000 ft. The deeper potential is thought to be in Silurian and Ordovician rocks as deep as 12,000 ft.

The companies believe that Nora, within 10 miles of giant Big Sandy shale gas field in Kentucky and West Virginia, has large shale gas potential.

The transaction is expected to close in May.

Range will retain its separate mineral and royalty interest that covers 80% of the acreage. Range hiked its 2007 capital budget 18% to $822 million, with 35% of the increase associated with expanding the Nora gathering system.

With the Nora transaction, Range has 378,000 acres prospective for shale development in Virginia and West Virginia and believes the acreage has 0.8-1.5 tcf in net unrisked recovery potential. Range estimated original gas in place in the Nora coals at 2.4 tcf and a gross 260 bcf of further recovery potential in the Nora tight gas sands.