Monthly Archives: February 2019

CNX Utica Well Problem

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On Saturday, January 26, a well drilled to the Utica formation, about 14,000 feet deep, communicated with several shallow wells, the deepest of which was drilled to about 3,000 feet. This is bad.

The well, drilled by CNX, and called the Shaw 1G, was being fracked. Pressure dropped suddenly and the workers stopped the fracking process. They discovered something blocking the wellbore. There doesn’t appear to be any information about where exactly the blockage is. That could be important because the blockage could indicate a failure in the casing. If there’s a failure in the vertical portion of the casing, that would explain why this well is communicating with much shallower wells. The casing failed and fracking fluid pushed out into the formation or formations that the shallow wells are producing from.

If, instead, there’s a failure in the horizontal portion of the casing, that means that fracking fluid propagated up through 11,000 feet of rock. The Marcellus Shale lies at around 5,000 to 7,000 feet deep in most areas of West Virginia That would mean that the fractures created through the fracking process in a Marcellus Shale well could potentially reach the surface and could certainly find their way into water wells.

The likelihood that the fractures pushed up through 11,000 feet of rock is low. Fracking has been going on for long enough now that it’s hard to believe that under normal circumstances this kind of thing would happen. There just aren’t any reports of it happening. There have been reports of water wells being ruined and of shallow wells being stimulated by fracking, however. Maybe this happens more often than we think, we just don’t realize what’s going on.

Update: The Pittsburgh Post-Gazette is reporting that there are now nine wells impacted by the problem. Interestingly, none of them are in line with the horizontal path of the well. It runs southeast, and the nine wells are to the north, west, and east. Additionally, the other Marcellus Shale wells in the area are not affected. This almost certainly means that the casing in the vertical portion of the well failed and allowed pressure to flow into a formation that all nine of the affected wells are producing from.

Today, You are Like Columbia Natural Gas

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Columbia Natural Gas has a little bone to pick with Southwestern Energy. It’s one that you might find yourself picking with the company you sign a lease with, too.

Back in 2007 Columbia signed a sub-lease with Southwestern. That means that Columbia had bought a lease from someone and turned around and sold at least some of the rights to that lease to Southwestern.

In that sub-lease, Columbia made it clear that they expected to be paid a royalty on all of the gas produced, whether it was sold or not. You see, it’s expected that royalties get paid on gas that’s sold. But not all the gas gets sold, and when a company doesn’t sell gas it doesn’t want to pay royalties. In other words, if gas was lost through a break in a pipeline, or flared, or used to run machinery, Southwestern wouldn’t usually pay royalties on it.

In this lease, that was not the allowed. Southwestern had to pay royalties on everything that came out of the ground whether it was sold or not.

Columbia is suing for $17,000 in unpaid royalties, plus any amounts it’s not aware of already. I expect that they think there is a lot more to be paid or they probably wouldn’t be worrying about it.

Your lease probably includes language that says your company doesn’t have to pay you a royalty on gas unless it’s sold. That’s pretty standard. However, if you think that it could impact your royalty checks you should make sure to get a clause in your lease or addendum saying that you’ll be paid on all gas produced, whether it’s sold or not.