American Oil and Gas Reporter - June 2014 - 164

ConventionSection: Pennsylvania Independent Oil & Gas Association
and other agencies are committed to developing a handbook of approved mitigation measures that will enable operators
to avoid a lengthy approval process and
simply identify preapproved mitigation
measures for avoiding or protecting
species. He says the Pennsylvania Game
Commission has identified 16 such species
and that the Pennsylvania Department of
Conservation and Natural Resources has
identified hundreds.
"I think this is another area where we
can work collaboratively to make sure
we have a streamlined process that, in
my opinion, is the intent of the general
assembly," Perry says.
Uncertainty within the industry over
the process, a final proposal, and its ultimate impact on conventional operators
can be tempered in the meantime through
open conversations about proposals and
issues, and how to address them, Perry
holds.
"At some point, we will have a document that will contain some of the more
substantial revisions we have talked about
in our work group meetings that will be
appropriate for a second round of public
comment, prior to ultimate finalization,"
Perry told conference attendees.
Adjust Timeline
Because of the volume of public comments, Perry says the regulatory timeline
for issuing new regulations may need to
be extended beyond March 14, 2016.
PIOGA's Slagel insists the entire
process has been rushed, which he labels
a posture the state adopted from the beginning that has added to uncertainty
about the final outcome and its impact
on conventional operators. The DEP failed
earlier to take into consideration comments
from TAB working groups prior to submitting the initial proposal to the EQB,
he charges.
"It was very clear at the TAB meetings
that, up until probably its publication of
proposed rules, there seemed to be a rush
on in the DEP," he says. "(Agency personnel) were clear in letting us know
they had to get these done sooner rather
than later. That appears to have changed
now because of the number of comments
they received as well as having a new
DEP secretary step in and express a number of concerns."
Slagel acknowledges that there is a
mandatory two-year deadline for approval
that begins when the document is forwarded to the IRRC.

Perry insists the timing of forwarding
the proposal was necessary to keep the
process on track and meet the state-mandated timeline.
He adds that he has directed his staff
to work backward from March 14, 2016,
and identify key dates by which DEP
needs to meet various goals.
"It's not our intention to push it fast
or take it slow," he insists. "We do want
to have an appropriate amount of time to
work on it."
Exempt Conventional
Perry also promised PIOGA the DEP
was working hard to distinguish between
conventional and unconventional operators.
"We have identified several provisions
that shouldn't have brought conventional
operators in," he says. "One is managing
temporary (surface) lines for moving
water. I know some folks use a fire hose
for a day and then it's gone. That is more
of an issue for conventional operators."
He adds that there are misunderstandings about what the initial versions of
the rule require. For example, Perry says,
the proposal contains no requirement for
vandal-proof mechanisms on all lease
tanks, but only on new tanks or those
significantly refurbished by being emptied
and having the bottom replaced.
Neither does the rule require double
lining to protect freshwater impoundments,
he continues. However, the rules do propose bank and construction standards for
ponds used for unconventional wells,

Perry allows. Small ponds, including
those built by farmers, are exempt, he
adds.
"We felt like appropriate embankment
standards were reasonable," he told
EOGCTS attendees. "And we use the
same embankment standards that have
been there for years. In fact, some operators
thought it was required already. So from
their point of view, we were simply codifying a pre-existing standard."
Small pits that are used for a day and
covered are exempt from the new standards, Perry goes on.
"I think we have demonstrated that
we are ready, willing and able to engage
folks in productive conversations about
what is necessary and appropriate," he
intones.
Despite concerns about mechanical
integrity assessments for wells and the
amount of information required, Perry
says a form used initially to report well
conditions can be used in subsequent
years by placing an electronic check mark
on answers for questions about well status.
"It will be a 30-second operation," he asserts.
"If you give us a chance, we can
demonstrate our adaptability, but we also
need you to work with us so we can
demonstrate to the public, as well as to
our own folks, that these wells have been
out there for years and are, indeed, mechanically sound, and do not present any
risk to public safety, health and the environment," Perry told PIOGA.
❒

Magnum Hunter Places Utica Well On Production
HOUSTON-Magnum Hunter Resources Corp.'s first dry gas Utica Shale
well, the Stalder No. 3UH, located on
the Stalder pad in Monroe County, Oh.,
was placed on production after testing at
a peak rate of 32.5 million cubic feet a
day on an adjustable rate choke with
4,300 psi final circulating pressure. The
company adds the well continues to produce fracture water at a rate of 1,400
barrels a day.
As the well continues to clean up,
Magnum Hunter says it expects the actual
gas sales rate will increase as water production declines. The Stalder No. 3UH
was drilled and cased to a true vertical
depth of 10,653 feet with a 5,050-foot
horizontal lateral and fractured with 20
stages.
Triad Hunter LLC, a wholly owned

164 THE AMERICAN OIL & GAS REPORTER

subsidiary of Magnum Hunter, is the operator with a 47 percent working interest.
Magnum Hunter says other nonoperated
partners are Eclipse Resources, Statoil
ASA and Northwood Energy Corp.
"Our first well on the Stalder pad is
the most eastern well, and one of the
most southern wells drilled to date in the
entire Utica play of Ohio," says Gary C.
Evans, chairman of the board and chief
executive officer of Magnum Hunter.
"The well's production is almost pure
methane (97 percent) and therefore, there
is no need for processing. We are looking
forward to drilling our first Utica well
just across the Ohio River in West Virginia.
This new Utica well should geologically
be deeper and higher pressure than the
Stalder well."
r

American Oil and Gas Reporter - June 2014

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