(03/22/2008)

A single stake in a small meadow along Vineyard Ridge
road on 35-acres of land bought by Chesapeake, indicates
area being surveyed for a likely exploratory gas well

By Bob Weaver

A major exploratory gas well to be drilled in Roane County by energy giant Chesapeake Energy, is a hot topic in the region.

The well is reportedly a deep horizontal drilling operation that could be "down to the granite," ushering in a new generation of natural gas drilling in the region.

Cindy Raines with the West Virginia Oil and Gas Conservation Commission says her agency has not received a drilling permit application for such a well, but Chesapeake has actually purchased 35 acres of land around the site, as opposed to exercising domain over the landowner to locate the well.

STAKES ARE POUNDED

The company has "already pounded stakes" for the location, about five miles from State Rt. 36 on Vineyard Ridge, with considerable surveying.

While horizontal wells have been drilled in WV, such a well could be as deep as the exploratory deep well drilled at Mt. Zion, Calhoun County about 1972 at 22,000 feet - straight down.

Despite thunderous booms when that drilling hit gas pockets, shaking nearby houses, the Standard Oil-Gulf consortium reported they found little gas with the exploratory project.

Horizontal drilling generally crosses a number of different royalty holders, and has been an issue of discontent between producers and stakeholders.

Vineyard Ridge has large rock formations
with sweeping vistas of Roane County

Horizontal drilling could be done in several different directions from one well site.

Neighbors around the site claim the project is not a routine permit, with significant issues related to spacing and unit size of the operation, claiming Chesapeake is bringing in drilling equipment and crews from out-of-state to drill the well.

Chesapeake Energy has not replied to requests regarding this operation.

"MAKES YOUR HEAD HURT"

Following a $400+ million verdict against Chesapeake in Roane County related to the company charging production costs against the royalty holders "sacred" 1/8 ownership, it appears the company is continuing the practice, with some modifications.

Producers appear to be using more sophisticated language in dealing with local royalty holders since the Roane verdict.

A royalty check stub reads "Unless otherwise stated in the lease, Value Rec refers to the amount actually received by the operator/lessee in the sale of the gas or oil. It may reflect the price received from the affiliated purchaser. Deduct refers to the deductions identified in the Deduct Code below and are limited to deductions made by the operator/lessee. Deductions and/or charges from the price paid made by the third party transporters, gatherers or producers may not be reflected."

An oil and gas attorney, speaking to the Herald said "Sorta makes your head hurt. It has the ring of not being very nice to the royalty holders."


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