Marcellus briefs

Feb. 10, 2015

Gastar Exploration says frac lawsuits resolved

Gastar Exploration Inc. of Houston announced resolution of lawsuits that it had faced regarding its fracturing plans for the Marcellus shale.

West Virginia Circuit Judge David W. Hummel late last year dismissed Gastar from a lawsuit filed by Eagle Natrium LLC in Marshall County, requesting a temporary injunction against Gastar's fracturing plans for the Marcellus shale.

Separately, a trial court threw out the lawsuit's remaining claims against the West Virginia Department of Environmental Protection, which Eagle was pursuing to invalidate permits issued to Gastar.

In October 2014, a similar lawsuit Gastar faced in Pennsylvania was shut down after Allegheny County Court of Common Pleas Judge Christine Ward found Eagle failed to prove Gastar's fracturing activities present a threat to Eagle's adjacent salt mining operations.

J. Russell Porter, Gastar's president and chief executive officer, said the company previously drilled and fractured 57 Marcellus wells in the vicinity of Eagle's salt mining operations without incident.

American Energy merges Utica, Marcellus units

American Energy-Utica LLC and American Energy-Marcellus LLC planned to merge, and the resulting company will have more than 300,000 acres in the Utica and Marcellus shales in eastern Ohio and northern West Virginia.

The new company, American Energy Appalachia Holdings LLC, will be wholly owned by current shareholders of the two American Energy affiliates.

American Energy Partners was founded in 2013 by former Chesapeake Energy Corp. CEO Aubrey McClendon.

Chesapeake-Southwestern revise transaction terms

Southwestern Energy Co. closed its purchase of assets in West Virginia and southwest Pennsylvania from Chesapeake Energy Corp. for $4.975 billion. Terms originally called for $5.375 billion, but the price was adjusted for certain items.

The properties sold included about 1,500 wells overall, of which 435 wells were in the Marcellus and Utica shale formations. Some firm transportation contracts also were included. The deal was announced in October 2014.

The sale was expected to help Chesapeake reduce debt. Chesapeake said it has liquidity "of approximately $9 billion" as of late December 2014.

Statoil sells interest in noncore assets

Statoil sold part of its non-operated stake in the southern Marcellus play to Southwestern Energy for $394 million. Statoil agreed to reduce its stake in the assets to 23% from 29%.

The divested share of Statoil's Southern Marcellus acreage to Southwestern represents about 30,000 acres. Statoil's third-quarter production from the Marcellus play was 130,500 boe/d, of which 4,000 boe/d came from assets included in the sale.

"I am delighted that we have concluded this important transaction with Southwestern despite the turbulence in today's energy markets," said John Knight, Statoil executive vice-president for global strategy and business development.

Statoil established holdings in US unconventional assets by entering the Marcellus in a joint venture with Chesapeake Energy Corp. in 2008.

Archaeologist joins Navarro & Wright

Timothy A. Carn, RPA, has joined Navarro & Wright Consulting Engineers Inc.'s Cultural Resources Group as its field director to supervise excavations planned for transportation projects in Pennsylvania.

Carn has experience in field, laboratory, and collection settings, and expertise in developing and coding digital cataloging systems.

OOGA promotes Shawn Bennett

Shawn Bennett has succeeded Tom Stewart as executive vice-president of the Ohio Oil and Gas Association. Stewart retired after serving 23 years with OOGA although he continues serving as a consultant to the association.

Bennett was promoted from his previous role as OOGA senior vice-president.

OOGA said that Stewart has been the voice for Ohio's energy producers, and that the organization has flourished under his direction and during a time of Ohio's expanding shale industry.

EPA fines XTO for water violations

XTO Energy Inc., a subsidiary of ExxonMobil Corp., will pay a civil penalty of $2.3 million for Clean Water Act violations, which involved waterways near Marcellus drilling operations in West Virginia, said the US Environmental Protection Agency and the Department of Justice.

The violations were found in streams and wetlands in Harrison, Marion, and Upshur counties. In addition, EPA said XTO Energy will spend an estimated $3 million to restore eight sites damaged by unauthorized discharges of fill material into water.

XTO also will implement a comprehensive plan to comply with federal and state water protection laws at its West Virginia horizontal drilling sites. Sam Hirsch, acting assistant attorney general for DOJ's Environment and Natural Resources Division, said the settlement resolved allegations XTO illegally discharged dredge and fill materials. The state of West Virginia was to receive half of the $2.3 million.

EPA OKs water report from Pennsylvania

The US Environmental Protection Agency approved Pennsylvania's 2014 Water Quality Monitoring and Assessment report for the state's streams, rivers, and lakes, the Pennsylvania Department of Environmental Protection said.

A DEP spokeswoman in Harrisburg, Pa., said the "rigorous sampling" of the state's waterways has not changed since the beginning of the Marcellus shale drilling. The water reports noted no change in water quality pre- or post-Marcellus drilling.

Under the federal Clean Water Act, the water-quality report is required every 2 years. DEP said it will will continue its studies of the rivers and tributaries through 2015.

US Labor rules backwages due

Some 5,310 workers employed by Marcellus shale contractors and subcontractors in Pennsylvania and West Virginia were due nearly $4.5 million in backwages, the US Labor Department ruled, adding most violations stemmed from improper overtime payments.

An ongoing enforcement initiative by the Labor Department's Wage and Hour Division offices in Wilkes-Barre and Pittsburgh during 2012-14 found violations of the Fair Labor Standards Act (FLSA).

"Job sites that used to be run by a single company can now have dozens of smaller contractors performing work, which can create downward economic pressure on lower-level subcontractors," said David Weil, administrator of the Wage and Hour Division.

In some cases, employees' production bonuses were not included in the regular rate of pay to determine the correct overtime rate of pay. Under the FLSA, all pay received by employees during the workweek must be factored in when determining the overtime premium to be paid.

Investigators also found some employees were misclassified as exempt from the FLSA overtime provision and were not paid an overtime premium regardless of the number of hours worked.