Exco continues drilling Pennsylvania's Marcellus shale

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Jan. 15 -- Exco Resources Inc., Dallas, said its Marcellus shale exploration and production activities, including drilling in Pennsylvania, are proceeding as planned with no interruption of its 2010 business goals.

"Our business plan for Marcellus shale development is proceeding as we projected,” said Exco Chairman and Chief Executive Officer Douglas H. Miller, adding that his firm has drilled “several” Marcellus shale wells in Pennsylvania.

“We received all necessary permits and approvals to drill and operate our Marcellus wells, and we now have 60 drilling permits for future operations and continue to receive all such permits in a timely fashion,” said Miller, who noted that Exco has “one Marcellus shale drilling rig operating in Pennsylvania today."

Exco said the remarks were issued in response to “some recent media reports that incorrectly suggested Exco had been directed to cease some of its activities.”

The firm said those reports referred to “a letter Exco received from a local township supervisor in which a concern was raised over the zoning designation of an area where a single Exco vertical test well was drilled last October.”

After consulting with the township, Exco said it learned that the letter was sent in response to a complaint made by two local residents.

Exco said it received all necessary permits to drill the well and met with township officials before the well was drilled. Further meetings have been scheduled to discuss the zoning area designation concern raised by the two residents.

“Because drilling of the well was completed months ago, the township letter has had no impact or effect on that well,” Exco said, adding that its Marcellus well drilling and production in other areas of Pennsylvania were “completely unaffected” by this correspondence.

According to Miller, "Permits to drill and operate Marcellus shale wells in Pennsylvania are under the exclusive authority of the Pennsylvania Department of Environmental Protection.”

Echoing previous remarks by Exco officials, Miller said his firm “works closely with all appropriate agencies to ensure all permits and approvals are obtained prior to conducting E&P activities, and every well drilled to date has been fully permitted.”

Earlier this week, Exco Chief Operating Officer Hal Hickey said the company will continue working with Greenfield Township in Lackawanna County, and will ensure the firm is in full compliance with “all governing jurisdictions (OGJ Online, Jan. 14, 2009).”

According to local officials, the alleged violation could have resulted from a mistake in the maps of the site where the Exco well is located. The well site is located on a parcel adjacent to a golf course in an area zoned commercial recreation.

According to township supervisor Joseph Slebodnik, gas drilling is a conditional use in Greenfield's rural agricultural zones, which make up about 80% of the township, and industrial districts.

Slebodnik acknowledged that some township zoning maps mistakenly label the plot where the well was drilled as rural agricultural, which might have caused some confusion.

Contact Eric Watkins at [email protected].