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Gushers raise expectations for gas from Marcellus Shale

Two unexpected gushers in northeastern Pennsylvania are helping to illustrate the enormous potential of the Marcellus Shale natural gas field.

Each of the Cabot Oil & Gas Corp. wells in Susquehanna County is capable of producing 30 million cubic feet per day -- believed to be a record for the Marcellus and enough gas to supply nearly 1,000 homes for a year. Landowners who leased the well access, numbering fewer than 25, are splitting hundreds of thousands of dollars in monthly royalties.

"There was definitely excitement among the team that planned out these wells and executed their completion," said Cabot spokesman George Stark.

Drilling companies knew the Marcellus held a lot of gas. They just had to figure out a way to get it out, and they say they're getting better at it all the time.

The result is that the Marcellus, a rock formation beneath Pennsylvania, New York, West Virginia and Ohio, has turned out to be an even more prolific source of gas than anyone anticipated. Energy firms are boosting their production targets, not only because new wells are coming on line but also because they are managing to coax more gas from each well.

Operators say they have a greater understanding of the complicated geology of the Marcellus, allowing them to land their drill bits in the sweet spot of the formation.

They're drilling horizontally at greater distances, giving them access to more of the gas locked within the rock. They also are tweaking how they break apart the shale.

"It's like batting practice," said Matt Pitzarella, spokesman for Range Resources Corp. "The more you swing the bat, the better you get."

New York, in effect, has barred Marcellus drilling while the state Department of Environmental Conservation develops new rules governing horizontal drilling. Those rules could be released as early as Friday, but state officials also have indicated that the DEC may not meet that deadline.

Fort Worth, Texas-based Range has boosted its estimate of the amount of natural gas it ultimately will be able to harvest from its Marcellus Shale wells, telling investors this month that it plans to triple production to 600 million cubic feet per day by the end of next year.

National Fuel Gas Co. executives also have reported similar increases in the yields from the wells the company is drilling in the Marcellus region of Pennsylvania.

The Amherst, N.Y.-based energy company attributed the improved results to lengthening the horizontal portion of the wells, sometimes to as much as 5,000 feet, and to increases in drilling proficiency with experience.

Major oil companies like Chevron Corp., Exxon Mobil Corp. and Royal Dutch Shell PLC have placed multibillion-dollar bets on the Marcellus, a 400 million-year-old rock formation that geologists say holds the nation's largest reservoir of natural gas and perhaps the second-largest in the world.

To unlock the shale's riches, drillers combine horizontal drilling with hydraulic fracturing, a technique known as fracking that pumps millions of gallons of water, along with sand and chemicals, into the well to creature fissures in the rock and allow natural gas to flow up. Fracking has raised environmental issues, and the U.S. Environmental Protection Agency is studying its impact on groundwater. The industry insists the process is environmentally safe.

The technology has unleashed a drilling frenzy in Pennsylvania -- where more than 3,300 Marcellus wells have been sunk the past few years -- and accounts for a twelvefold increase in U.S. shale gas production since 2000.

Gas from the Marcellus and other shale fields around the country -- including the Barnett Shale in Texas and the Haynesville Shale in Louisiana -- now represents a quarter of total U.S. natural gas production.

The new Cabot wells help illustrate why boosters believe the gas field could help steer U.S. energy policy for decades to come.

They also were a nice bit of good news for Cabot, the Houston-based driller that endured two years of bad publicity after state regulators accused it of polluting water supplies in Susquehanna County's Dimock Township.

The wells -- also located in Dimock -- are "producing like gushers," exulted Stark, the Cabot spokesman, helping to push the company's production above 400 million cubic feet per day.

Like other drillers, Cabot has steadily increased the horizontal length of its wells, from an average of 2,100 feet in 2008 to 3,600 feet last year, achieving a corresponding increase in capacity.

Capacity, though, does not always translate to production.

Cabot's wells, and Marcellus wells in general, are not running at full tilt, mainly because the infrastructure required to take the gas from wellhead to market is not yet fully in place.

News Business Reporter David Robinson contributed to this report.

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