Category Archives: News / Media

Chesapeake Energy Selling Some Utica Shale land in Ohio


The natural gas and oil in Ohio’s Utica Shale is going to help Chesapeake Energy’s debt-ridden balance sheet — whether Chesapeake is the firm that extracts the fuels or not.

Through a listing on the website of Meagher Energy Advisors, Chesapeake has put more than 337,000 acres across 19 eastern Ohio counties up for sale — about one-fourth of the company’s total Utica holdings.

More than 80 percent of the land for sale is held-by-production, meaning landowners are locked into current contracts and cannot renegotiate for more money with a new company. Chesapeake said the areas where it is looking to sell are places where its land ownership is less concentrated and company leases aren’t as side-by-side as in other parts of the state.

The Oklahoma City driller is the biggest in the country to have such a substantial stake and financial obligation in Ohio’s counterpart to the Marcellus Shale region. In the past, Chesapeake has promised such lucrative returns from that area that beleaguered CEO Aubrey McClendon called it “the biggest thing economically to hit Ohio, since maybe the plow.”

Scattershot public data haven’t stopped Mr. McClendon from extolling the promise of the Utica, continuing a “trust me” line to shareholders while offering little evidence to fact-check those claims. Ohio regulators generally wait months before receiving production reports from Chesapeake, and industry analysts say the company’s sky-high estimates fall back to earth as more information is revealed.

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Encourage friends, family, and neighbors to look before they lease

Public Service Announcement

There is renewed interest by energy companies to lease property in Athens, Vinton, Meigs, and Washington counties. Claims are being made via newspaper and radio outlets that landowners could receive up to $5,700 per acre if they sign an oil and gas lease.

Landowners are encouraged to Look Before they Lease with any energy company. Landowners can call Susi at (740) 767-4938 for more information about a landowner toolkit that will help them understand important information that should be included in a lease. It is important to fully understand all information contained in any lease provided by an oil and gas producer, attorney, or 3rd party before signing.

Look Before You Lease has worked with an oil and gas law firm in Ohio to create a sample landowner friendly lease that can be used as a starting point to help understand terms and provisions included in oil and gas leases that should be included to help protect their families interests.

Landowners should not sign any lease without first working with a qualified oil and gas attorney and should understand all financial implications of entering into an oil and gas lease.
Visit for more information or call (740) 767-4938

End Public Service Announcement
Additional Note: Any landowners considering a lease with Cunningham Energy, LLC. should know that they will not automatically receive $5,700/ acre and may not receive more than $125 per acre as you can see from the excerpt below.

Landowners should also note that royalties from vertical and/or shallow wells may not produce quantities of oil, gas, or other hydrocarbons in the quantities that that horizontal wells are currently producing in the Utica Point Pleasant Shale Play. Therefore royalties paid to landowners with shallow or vertical test wells may be different from a landowners expectation.
Excerpt from Athens News Article
Rather than paying the $2,500 per acre signing bonus it had earlier been willing to pay, according to a letter Lavelle sent to his clients Friday, the company is now willing to pay the far more modest amount of $125 per acre to keep the already-signed landowners under contract while the company investigates the geology of the county.
The property owners, according to Lavelle, will get the initial reduced payment even if Cunningham doesn’t put together a joint venture to drill. If the project does come to fruition, the leases will pay off $5,700 per acre over the life of the lease – though this will be more of a “back-end” than an up-front payment, and a landowner won’t get this full amount if his or her land goes into oil and gas production and royalty provisions start kicking in. As the amendment states, “The likelihood of that many vertical wells being drilled and finding oil and gas in commercial quantities to hold the leases by production within the time frames in question is very unlikely and highly doubtful so if the results are good, you will likely get most of the bonus rental payment until your property is drilled.”
The higher payment is contingent on the Utica actually producing here, and Cunningham and/or its venture partner drilling production wells. (This prospect also depends on the company’s finding a new investment partner, which according to Lavelle it’s in the process of locating.)
By Jim Phillips. May 06, 2012

Click here for a PDF version  Public Service Announcement

Lisbon Ohio: Seismic testing company sues property owners over access

Hearings to address lease agreements and seismic testing

By Burton Speakman


A company tasked with seismic testing for Chesapeake Exploration LLC on Columbiana County land contends five landowners illegally have kept the company off their properties.

Preliminary-injunction hearings for all the defendants are scheduled for today in Columbiana County Common Pleas Court.

TSG NOPEC Geophysical Co. has filed suit against James and Janet Zimmerman of Salem; Phillip and Brenda Glasser, Homeworth; Gary and Eleanor Carter, Beloit; Larry W. Fryfogle, Beloit; and Golden H. Acres LLC, Salem.

The company alleges that despite oil and gas lease agreements with those properties, the owners refused to sign a permit that would allow TSG to come onto their land to conduct seismic testing, according to court records.

TSG was hired by Chesapeake to conduct the tests.

TSG alleged it was denied access to the properties several times. The company states access to the land is critical to the testing procedure, and that by denying access, the property owners violated the terms of their lease agreements.
All properties in question are located either south or southeast of Salem.

Three of the five leases involved in this case are older leases that provided small payments of $1 to the landowner and then provided 1/8 of total production in royalty costs and a certain amount of free gas per month.

These were pretty standard leases for that time, said Scott Zurakowski, a Canton attorney who represents Gary and Eleanor Carter.

“These older leases didn’t include the right to do seismic testing,” Zurakowksi said.

The key to this case is whether the contract implies the right to do seismic testing, he added.

Other courts have decided that if the contract includes the right to exploration, then it has an implied right for seismic testing, Zurakowski said. The older three contracts do not include references to exploration.

“This case is important in Ohio because the Ohio Supreme Court has not made any decisions on this kind of case,” he said.

The case will have an impact on hundreds and thousands of landowners with similar oil and gas leases throughout Ohio, Zurakowski said.

Frederick S. Coombs III, a Youngstown attorney representing James Zimmerman and Golden H. Acres LLC, said in an email that his clients’ leases were radically different from the others in the TSG case.

They were negotiated in fall 2011 to build in protections for the landowners, he wrote.

Seismic testing helps to determine the potential oil and gas reserves on a property. The testing helps to maximize production and decrease potential impact on the land, according to the complaint filed by TSG.

Bruce Smith, the attorney representing TSG, was not available to comment.

Link to Original Article:

Blog Post From Dept of Interior: Is the Recent Increase in Felt Earthquakes in the Central US Natural or Manmade?

By David J. Hayes, Deputy Secretary, U.S. Department of the Interior

Last week, following the publication of an abstract intended to preview an upcoming talk by a U.S. Geological Survey (USGS) scientist, a number of news articles started popping up about new scientific evidence of a link between unconventional oil and gas production here in the United States, and seismic activity (earthquakes).

Unfortunately – although not surprisingly given the limited information available in the abstract – the accuracy of these media reports varied greatly. With this blog post, I want to clarify a few points about USGS’s important and ongoing work to study induced seismicity.

Science will continue to play a critical role as the Obama administration moves forward with an all-of-the-above strategy for American energy. USGS’s contributions to this effort, including scientist Bill Ellsworth’s work on the correlation between wastewater injection sites and seismicity, represent an important part of the overall dialogue about how we can continue to expand domestic oil and gas production safely and responsibly.


As part of its ongoing effort to study a variety of potential impacts of U.S. energy production, USGS scientists have been investigating the recent increase in the number of magnitude 3 and greater earthquakes in the midcontinent of the United States. Beginning in 2001, the average number of earthquakes occurring per year of magnitude 3 or greater increased significantly, culminating in a six-fold increase in 2011 over 20th century levels.

These earthquakes are fairly small – large enough to have been felt by many people, yet small enough to rarely have caused damage.

An increase in earthquakes such as this prompts an important question: are they natural, or man-made? To address this question, a team of USGS scientists led by Bill Ellsworth of the Earthquake Science Center analyzed changes in the rate of earthquake occurrence in the midcontinent using large USGS databases of earthquakes recorded since 1970.

Our scientists then took a closer look at earthquake rates in regions where energy production activities have changed in recent years. The following findings will be presented on April 18 at the annual meeting of the Seismological Society of America, with a published study forthcoming.

Preliminary Findings

USGS’s studies do not suggest that hydraulic fracturing, commonly known as “fracking,” causes the increased rate of earthquakes. USGS’s scientists have found, however, that at some locations the increase in seismicity coincides with the injection of wastewater in deep disposal wells.

Wastewater is a byproduct of oil and natural gas production from tight shale formations and coal beds. Generally, wastewater produced from many oil and gas production wells within a field may be injected through a single or just a few disposal wells.

In preliminary findings, our scientists cite a series of examples for which an uptick in seismic activity is observed in areas where the disposal of wastewater through deep-well injection increased significantly. These areas tend to be in the middle of the country – mostly in Colorado, Texas, Arkansas, Oklahoma and Ohio.

What We Know

While it appears likely that the observed seismicity rate changes in the middle part of the United States in recent years are manmade, it remains to be determined if they are related to either changes in production methodologies or to the rate of oil and gas production.

We also find that there is no evidence to suggest that hydraulic fracturing itself is the cause of the increased rate of earthquakes. The fact that the disposal (injection) of wastewater produced while extracting resources has the potential to cause earthquakes has long been known. One of the earliest documented case histories with a scientific consensus of wastewater inducing earthquakes, is at the Rocky Mountain Arsenal well, near Denver. There, a large volume of wastewater was injected from 1962-1966, inducing a series of earthquakes (below magnitude 5).

We also have previously reported that the production of oil and gas (extraction) can potentially cause earthquakes when changes in the underground stresses created by the removal of large volumes of oil, gas or water are large enough.

And, of course, we know that the Earth’s crust is pervasively fractured at depth by faults. These faults can sustain high stresses without slipping because natural “tectonic” stress and the weight of the overlying rock pushes the opposing sides of the fault together, increasing the frictional resistance to fault slip. The injected wastewater in deep wells can counteract the frictional forces on faults, causing an earthquake.

Not all wastewater disposal wells induce earthquakes. Of approximately 150,000 Class II injection wells in the United States, including roughly 40,000 waste fluid disposal wells for oil and gas operations, only a tiny fraction of these disposal wells have induced earthquakes that are large enough to be of concern to the public. Information on wastewater disposal wells and the US Environmental Protection Agency’s Underground Injection Control program is available online.

Earthquakes induced by fluid-injection activities are not always located close to the point of injection. In some cases, the induced earthquakes have been located as far as 6 miles from the injection well.

Current and Future Research

The USGS is coordinating with other federal agencies, including the EPA and Department of Energy, to better understand the occurrence of induced seismicity through both internal research and by funding university-based research with a focus on injection-induced earthquakes from wastewater disposal technologies. For instance, USGS and its university partners have deployed seismometers at sites of known or possible injection-induced earthquakes in Arkansas, southern Colorado, Oklahoma, and Ohio.

Currently, there are no methods available to anticipate whether a planned wastewater disposal activity will trigger earthquakes that are large enough to be of concern. Evidence from some case histories suggests that the magnitude of the largest earthquake tends to increase as the total volume of injected wastewater increases. Injection pressure and rate of injection may also be factors. More research is needed to determine answers to these important questions.

Although we cannot eliminate the possibility, there have been no conclusive examples linking wastewater injection activity to triggering of large, major earthquakes even when located near a known fault.

It’s clear that science is a key part of the Obama administration’s all-of-the-above strategy for American energy, and we will continue to research these important questions – working with industry and our state, federal and academic partners to ensure that we continue to expand oil and gas production safely and responsibly in the United States.

Link to Original:

New Presentation Posted: Ohio Department of Natural Resources – Geological Survey

A new presentation (PDF of a powerpoint) has been posted on ODNR’s website. The authors of the presentation are: Larry Wickstrom, Chris Perry, Ron Riley, and Matthew Erenpreiss. Within the presentation there are some new maps of the Utica-Point Pleasant shale play, aswell as information about unit sizes and examples of where a well pad might be located within a unit. There is also information about a proposed wet gathering system for Ohio

See the presentation here:

Harrison County: Judge’s Ruling Limits Shale Developers Drilling Rights

By Alison Grant – The Plain Dealer

CADIZ, Ohio — Sparsely populated Harrison County, in the rolling foothills of the Appalachians, boasts a rich vein of U.S. history.

The county was a hotbed of abolitionist activity in the years leading up the Civil War. It’s where General George Armstrong Custer and Edwin Stanton, President Lincoln’s secretary of war, were born. And on Charleston Street, in the county seat of Cadiz, is a two-story, white frame house that is the birthplace of actor Clark Gable.

In recent years though, Harrison County has been out of the spotlight, but a judge’s ruling could change that.

Harrison County Common Pleas Judge Michael Nunner has sharply limited Chesapeake Exploration’s ability to drill for shale gas and oil from a property where the company has leased the mineral rights. The ruling is rattling an industry that Cleveland State University economists predictcould pump $5 billion a year into the state’s economy by 2014.


“It could affect Chesapeake and other drill companies across Ohio,” said David Hudson, who represents the Jewett Sportsmen and Farmers Club, the landowner that sued Chesapeake.

Nunner said while Chesapeake can vertically extract gas and oil from underneath the hunt club’s 187 acres of woods and fields, the energy company can’t use the land to drill sideways to get at reserves from adjacent land.

He ordered Chesapeakea dominant player in Ohio’s shale production, to stop horizontal drilling that extends beyond Jewett’s property line unless it gets the club’s permission to go ahead.

Extracting natural gas and oil from shale formations depends on lateral drilling to carry millions of gallons of water under intense pressure to fracture surrounding rock. Horizontal bores can extend up to 10,000 feet, or almost two miles, from the drill hole. Chesapeake already had poured a 12-acre concrete pad for rigs but has sunk no wells.

“They don’t have a right to come in and destroy our surface without fair compensation,” said Jewett club president John Harris.

A spokesman for the Oklahoma-based Chesapeake declined comment. So did North American Coal Co., which owns the mineral rights and leased them to Chesapeake.


The coal company, in a motion earlier this month, asked Nunner to reconsider his order that effectively halted Chesapeake’s ability to profitably plumb the shale rock some 8,000 feet below ground.

North American Coal, in its motion, said that the order directly conflicts with Ohio public policy to encourage development of natural resources “by halting any oil and gas production through the use of contemporary horizontal drilling methods on this property.”

By creating an “erroneous new law, it would impede or prevent the development of oil and gas elsewhere in Ohio, with significant adverse effects for the state’s economy,” the company said.

Harris said the club’s 190 members are about evenly divided between those looking for a good settlement from Chesapeake in exchange for their approval on drilling and those wanting the company to go away.

The club, in the center of Harrison County, about seven miles north of Cadiz, dates back to 1959 when its 12 founders took out a bank loan to buy a chunk of land they were leasing to hunt white-tailed deer, jackrabbits and wild turkey.

“It makes us a unique piece of property because there’s no houses around,” Harris said. “We’re sitting right there in the middle of nowhere.”

Members today raise money by renting out a lodge for wedding and graduation parties, throwing annual corn roasts and raffling off all-terrain four-wheelers. They spend about $1,000 a year stocking three lakes at the club with bass, blue gills and crappies.

After Nunner blocked horizontal drilling, Chesapeake approached Harris about starting from square one and working out a deal.

“We sent our (monetary) demands and have not heard another word since,” Harris said. He would not elaborate on the proposed settlement.

North American Coal deeded the land to the club in 1959, said Gregory Brunton, a lawyer for the Cleveland-based Reminger law firm that represents the club.

Coal companies across eastern Ohio often sold off surface real estate when they were done mining. But those companies held on to the underground mineral rights in case they wanted to go back in and take out more coal, or oil and gas.

Ohio law says owners of such “severed” mineral interests have a right to “reasonable” use of the surface to get at the minerals.

Brunton said the club’s deed didn’t anticipate shale gas extraction — which requires not only long horizontal wells, but also large well pads with multiple wellheads on each, storage tanks on site, and convoys of trucks hauling in millions of gallons of water.

The Jewett lawsuit is one of the latest legal fights shaping up over shale gas drilling in Ohio.

In a separate lawsuit filed this month, 33 landowners in Columbiana County contend that land men concealed or actively misled them about how much surface and below-ground disruption was involved in shale gas extraction. And in Akron, Chesapeake sued 95 landowners in January for attempting to get out of their leases and sell them to another bidder.

In this latest case, Reminger attorneys representing the sportsmen’s club have been fielding calls from other lawyers who wonder about the impact of the Harrison County case on the landowners they represent.

If Jewett Sportsmen and Farmers Club and Chesapeake can’t settle their dispute, the case is expected to go to trial on the club’s claim that Chesapeake trespassed on its property.

“It may have potentially wide ramifications,” said Brunton, who considers the case precedent-setting in Ohio.

Link to Original Article:

Press Release From Governor Kasich’s Office: ODNR Releases Preliminary Report on Youngstown Area Seismic Activity

COLUMBUS, OH – Ohio’s oil and gas regulators today announced new environmentally responsible standards for transporting and disposing of brine, a by-product of oil and natural gas hydraulic fracturing. The new regulatory framework makes Ohio’s rules for brine monitoring and disposal among the nation’s toughest. The Ohio Department of Natural Resources (ODNR) developed the new regulations after researching the link between a series of seismic events in the Youngstown area and a brine disposal well.

The new safeguards: prohibit any new wells to be drilled into the Precambrian basement rock formation; mandate operators submit extensive geological data before drilling; and implement state-of-the-art pressure and volume monitoring devices including automatic shut-off switches and electronic data recorders. In addition, ODNR will require that brine haulers install electronic transponders to ensure “cradle to grave” monitoring of all shipments.

“Ohio has developed a new set of regulatory standards that positions the state as a national leader in safe and environmentally responsible brine disposal,” said ODNR Director James Zehringer. “Ohioans demand smart environmental safeguards that protect our environment and promote public health. These new standards accomplish this goal.”

The new safeguards will be added to Ohio’s existing disposal well regulatory framework. The regulations will apply to new Class II disposal well permit applications and to existing disposal wells, if applicable. Ohio regulates Class II disposal wells on behalf of the U.S. EPA. In 1983, the U.S. EPA gave Ohio regulatory authority over its Underground Injection Control program because the state’s disposal well regulations met or exceeded U.S. EPA standards.

The comprehensive list of proposed new regulations includes:

  • Requires a review of existing geologic data for known faulted areas within the state and a prohibition on locating new Class II disposal wells within these areas;
  • Requires a complete suite of geophysical logs (including, at a minimum, gamma ray, compensated density-neutron, and resistivity logs) to be run on newly drilled Class II disposal wells. A copy of the completed log, with analytical interpretation, will be submitted to ODNR;
  • Authority for ODNR to require the plugging with cement of wells penetrating into the Precambrian basement rock and prohibiting injection into the Precambrian basement rock;
  • Requires the submission, at time of permit application, of any information available concerning the existence of known geological faults within a specified distance of the proposed well location, and submission of a plan for monitoring any seismic activity that may occur;
  • Evaluates the potential for conducting seismic surveys;
  • Requires a measurement or calculation of original down hole reservoir pressure prior to initial injection;
  • Requires conducting a step-rate injection test to establish formation parting pressure and injection rates;
  • Requires the installation of a continuous pressure monitoring system, with results being electronically available to ODNR for review;
  • Requires the installation of an automatic shut-off system set to operate if the fluid injection pressure exceeds a maximum level to be set by ODNR; and
  • Requires the installation of an electronic data recording system for purposes of tracking all fluids brought by a brine transporter for injection.

All of the reforms will be considered during the permitting process for new Class II disposal wells and will be implemented as attached permit conditions until they are either codified in law or written into administrative rule, which carries the weight of law.

ODNR also released a preliminary report on the relationship between the Northstar 1 Class II disposal well and 12 Youngstown area earthquakes.

Geologists believe induced seismic activity is extremely rare, but it can occur with the confluence of a series of specific circumstances. After investigating all available geological formation and well activity data, ODNR regulators and geologists found a number of co-occurring circumstances strongly indicating the Youngstown area earthquakes were induced. Specifically, evidence gathered by state officials suggests fluid from the Northstar 1 disposal well intersected an unmapped fault in a near-failure state of stress causing movement along that fault.

All of the conditions associated with induced seismic activity are addressed in Ohio’s new well permitting and construction regulations.

According to the U.S. EPA, more than 144,000 Class II disposal wells inject more than two billion gallons of brine every day in the United States. The U.S. EPA considers the deep injection of brine using Class II disposal wells as the preferred and environmentally safe method for disposal of oilfield fluid wastes. Prior to Class II disposal wells in Ohio, brine was stored in surface pits with harmful environmental results.

The report’s executive summary is available here. The full report is available here. The FAQ document is available here.

For more information, contact:
Carlo LoParo, ODNR Office of Communications

In a Nod to Gas Prices, Obama Talks About Energy

By: Mark Landler

Published: February 23, 2012, New York Times

MIAMI — President Obama, confronted by the political perils of surging gas prices in an election year, on Thursday defended his efforts to wean the United States off imported oil, even as he conceded there was little he could do in the short run to ease the pain at the pump.

Speaking to students at the University of Miami, in a swing state where gas averages $3.69 a gallon, Mr. Obama said: “Just like last year, gas prices are climbing across the country; this time, it’s happening even earlier. And when gas prices go up, it hurts everybody.”

The president offered what he called an “all-of-the-above” response, based on more domestic oil production, development of alternative energy sources and stricter fuel-efficiency standards.

Drawing a sharp contrast with Republicans and anticipating potential attacks on the campaign trail, Mr. Obama ridiculed his opponents for recycling a “three-point plan for $2 gas.”

“Step one is to drill, and step two is to drill, and then step three is to keep drilling,” he said.

This was the president’s first major effort to tackle an issue that has surfaced in the last few weeks as oil prices have been driven up by tensions in the Middle East, where Iran has threatened to retaliate against the West because of sanctions over its nuclear program.

Mr. Obama seemed keenly aware of the risk posed by oil prices. A previous cycle of price increases played briefly to the benefit of Senator John McCain during the 2008 campaign, when his running mate, Sarah Palin, revved up crowds with the chant, “drill, baby, drill.”

The president said that the United States is producing more oil now than at any time during the last eight years, with a record number of rigs pumping. The White House, he said, was prepared to open new areas in the Arctic Ocean and the Gulf of Mexico to exploration.

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Dominion to ship local gas to China

This article from the union of West Virginia Affiliated Construction Trades newsletter was passed along to us by the Wetzel County Action Group

It raises further questions about how much natural gas produced in Central Appalachia will be used domestically, or even within the region. There have been many concerns over the last several years about the amount of  oil and natural gas from the Marcellus and Utica that will end up being exported because many countries are currently (and are likely to continue) paying higher prices than domestic users of these products.  Thanks WCAG!

Click the image to view larger version

Ohio pursues ethane-cracker plant

COLUMBUS — Gov. John Kasich is pursuing the multibillion-dollar ethane-cracker facility that Shell Chemicals LP plans to build in Ohio, West Virginia, or Pennsylvania to capitalize on the increasing harvest of natural gas from Marcellus shale. The American Chemistry Council estimates that the plant would generate 17,000 jobs in chemistry and other industries as well as $1 billion in wages and $169 million in tax revenue.

A decision on the site is expected early this year.

Mr. Kasich flew to Houston in November to woo company officials. He handed them a stack of supportive letters signed by Republican teammates and Democratic rivals.

Link to original article:

More about the cracker plant….

Ohio trying to lure $2B natural gas processing plant

A decision on which gas-rich state to locate a $2 billion Shell Oil Co.    natural gas processing plant is “imminent,” the Cleveland Plain Dealer reports.

Shell could build the plant, expected to create hundreds of jobs, in West Virginia, Pennsylvania or Ohio, the newspaper reports. The plant, called a “cracker,” would help turn ethane into ethylene for plastic, the newspaper reports.

All three states have offered tax breaks to the company, and Gov. John Kasich flew to Houston in the fall to pitch Ohio to company executives, the newspaper reports. Ohio has not divulged the details of the incentive package it offered Shell.

Link to original article:

From Cleveland Plain Dealer 

“Shell is the first of the major oil companies to make a big investment,” said Edward “Ned” Hill, a professor of economic development at Cleveland State University. “Where that cracker ends up could end up influencing the regional headquarters of Big Oil.”

All three states are reported to be offering tax breaks and other incentives to try and lure Shell, which has given no hint of its affections.

“When we select our preferred site we will announce it,” Shell spokeswoman Alexandria Smith said Wednesday. “That will probably be February.”

Major cities like Cleveland are not considered contenders but they could certainly be affected. Any location will likely be rural, but not remote.

The plant needs hundreds of acres of land, according to Dan Carlson, Shell Chemical’s general manager of new business development in the Americas. Shell would also like access to railroads, river barges, a skilled workforce and university researchers, Carlson said via email.

Link to original: