Texas company ‘very positive’ about gas development here

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Over the last four years, Fort Worth, Texas-based natural gas company Range Resources has invested more than $250 million in gas exploration in Pennsylvania.

On Tuesday, some of the landowners who may benefit from that investment attended an open house at the company's 1601 Sycamore Road offices.

"We are here just to let the community know Range Resources is a good corporate neighbor and that we feel very positive about gas development in Lycoming and surrounding counties," said Brad J. Benjamin, Range Resource land manager-Appalachian Shale. "We're basically here to determine what potential the area may have.

"We feel comfortable that it's a good area," Benjamin added.

Range Resources drilled its first well in Pennsylvania in 2004, Benjamin said. Since then, the company has drilled more than 90 wells in the state, he said.

The company hopes to find significant amounts of natural gas trapped in a shale formation known as the Marcellus Shale, which runs deep under the ground from the Southern Tier of New York state through Pennsylvania to West Virginia.

Benjamin said the company has a history of drilling for natural gas in the Barnett Shale region of northeast Texas. The Marcellus Shale has many of the same characteristics as the Barnett Shale, he said.

Companies are using the same techniques used to extract gas from both shale formations among them, horizontal drilling and hydrofracturing.

Horizontal drilling involved drilling vertically to a predetermined depth, then gradually turning the drill so that it cuts through the rock horizontally.

Horizontal drilling is much more expensive than the vertical drilling, but has the potential of capturing significantly more natural gas, Benjamin said.

Hydrofracturing - commonly called "fracing" - involves the use of large amounts of pressurized water and sand to pulverize shale located deep under the ground and release gas trapped in the shale.

"We are one of the most significant producers and drillers of Marcellus Shale wells in the Appalachian basin," Benjamin said. "I know we've drilled and fraced more than any other company in Lycoming County."

"We've got a four-year head start on drilling shale wells in Pennsylvania," he said. "We've learned a tremendous amount over the last four years."

According to company geologist Jeremy W. Wolpert, the company has drilled three vertical wells in the county and is preparing to drill its first horizontal well. It has drilled the vertical portion of another horizontal well, he said.

Pressure tests performed on all three vertical wells have shown the wells can produce natural gas, Wolpert said.

For landowners to receive royalties for gas located on their property, gas must be removed and transported via pipeline to market.

None of the shale gas wells drilled in the county are connected to such a pipeline, though the company is taking steps to change that.

According to Mark C. Hunneshagen, district landman for Pennsylvania and West Virginia, Range Resources has entered into an agreement with a large gas pipe company to build the infrastructure needed to get gas wells into production.

Hunneshagen said he anticipates wells being connected to the pipeline by the end of the year.

One group that stands to benefit from that connection is the Bobst Mountain Hunting Club, which owns land in Cogan House Township.

About five years ago, the club leased 2,600 acres of land to Range Resources for $5 an acre. Today, some county landowners are commanding $2,000 or more an acre for a five-year gas lease.

According to club member David Kepner, $5 an acre looked like a good deal compared to the $1 an acre the club received from a previous gas lease from another company.

"Had we known what we know now, we'd be a lot happier," Kepner said.

Fortunately, the county's first shale well was drilled on club property and the club hopes to make a significant windfall once the well goes online, Kepner said.

"We're just waiting for the pipeline," he said. "We'll be better off in the long run."

Dallas-based Chief Oil and Gas Inc. recently opened an office in Fairfield Township.

According to company spokeswoman Kristi Gittins, the company plans to hold an open house as soon as its local staff is completely in place.