DEEPEST GAS WELL EVER DRILLED IN WV SLATED FOR ROANE - Chesapeake Seeking To "Force Pool" Royalty Holders

(11/06/2008)
By Bob Weaver

The deepest natural gas well ever drilled in West Virginia is being planned in the Vineyard Ridge area of Roane County.

The Chesapeake Energy well, located at the head of Bee Lick, is expected to be drilled to 22,443 feet.

The project was first reported by the Herald on March 22, 2008   Chesapeake Drilling Major Exploratory Well

Sources said the original application was to have been for a horizontal well, but that plan has apparently been changed.

The deepest well ever drilled in West Virginia was experimental, financed by a conglomerate of energy companies. It was drilled in the early 1970s at Mount Zion, Calhoun County, exceeding 20,000 feet.

The high-security operation was declared a dry hole by the producers, although residents experienced several earth-shaking explosions that caused windows to rattle and pictures to fall from the wall.

Local producer Alvin Engelke of Creston said the proposed Roane well is requiring a huge investment, with Chesapeake busy obtaining leases.

Chesapeake has been obtaining leases covering a 695-acre area, having filed a request with the WV Oil and Gas Conservation Commission.

Chesapeake is wanting to "pool" the holders so they can go ahead with the project.

Wirt County resident Thorn Roberts has complained to the Commission, saying "What Chesapeake is trying to do is totally brazen."

"Faced with a jury verdict in the same county (Roane)...they have gone out and taken many leases...using forms which legitimize those very practices," Roberts said.

Roberts says that holders who have declined to sign "industry standard" forms, could be forced to pool their interests by the Oil and Gas Conservation Commission. A hearing is set for December 2nd.

Roberts claims "Forced pooling statues use law enforcement powers to enforce their fraudulent standards."

Chesapeake has been unable to obtain the leases of about 9% of the holders. At issue is what the producer pays for royalty rights.

In Texas, where horizontal drilling is becoming more common, Chesapeake is using pooling under a Texas law to give them additional leverage to move projects ahead.

A so-called deep well, known in Roane County as the Parker Well, was drilled nearby in 1999. It just exceeded 10,000 feet.

Engelke said this is "not wildcatting," but part of a plan to deep drill in the region.

Chesapeake, after losing a $404 million dollar suit by royalty owners after deducting production costs from royalty payments, "Is now simply writing the deduction into their new royalty contracts, making it legal," said Engelke.