Chesapeake Energy Corporation (NYSE:CHK) met with the landowners located in Towanda townships to provide all the necessary information for them to learn and understand the company’s operational plans in the area.
According to Andy Travis, Landowner Relations Manager for Chesapeake Energy Corporation (NYSE:CHK), the company plans to conduct a series of meetings in different townships to communicate its plans this year, directly to the residents in specific areas.
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Travis informed landowners during a meeting on Tuesday night, regarding the reduction of rigs as Chesapeake pursues more wet gas in the area. He explained that wet gas is currently more profitable than the dry gas of the Marcellus Shale. According to him, the company will maintain the operations of five rigs in the area. The rigs will return once the price of natural gas rebounds.
In addition, Travis informed the Towanda landowners about the existence of 11 pads with 18 wells, and 3 water impoundments in Towanda and North Towanda townships. Chesapeake has a proposal for an additional 14 pads and it is scheduled to construct three pads next year. The company also has a proposal for 2 water impoundments in the future.
During the meeting, Travis said, “We’re actually in pretty good shape with pipeline, we’ve been more fortunate in constructing it in this particular area, so we’re a bit ahead of schedule.We currently only have six wells that are waiting on pipeline. By the end of 2012 we anticipate we’ll have around 16 and a half miles or better completed, leaving only about a half a mile left of pipeline to build for our operations.”
Furthermore, Travis showed to residents the total production of gas wells in the two townships, which is 3.3 million cubic feet (mmcf) per day, while Chesapeake’s Marcellus Shale average was at 4.75 mmcf per day.
He also discussed Chesapeake’s $300 million investments on local and statewide roads from 2010 to 2012, employment impacts of the company’s operational plans, the fueling stations for natural gas vehicles (NGVs). He explained that Chesapeake Energy Corporation (NYSE:CHK) is retaining the workers hired locally and they are moving with their rigs and crew in other parts of the country. He said the fueling stations are beneficial to companies with fleet vehicles that convert to natural gas and to the public because it is cheaper than gasoline.
During the meeting, George Wiseman, a member of Chesapeake’s Land Department, also discussed the specifics of the company’s oil and gas business operations in the area. He said, “Our intention generally is to drill six wells from each pad. We virtually never drill all six at the same time. When we first got here, when permits only cost $400 each, we would often get all six permits and that gave us the flexibility to drill any one of the six wells that we chose to drill, but we never intended to drill all six.
According to him, although Chesapeake Energy Corporation (NYSE:CHK) obtained six permits to drill, the company generally drills one or two wells. He also explained the company concentrated drilling in northwestern and southeastern directions to avoid large faults and fractures.
Wiseman also discussed general details of how Chesapeake’s drilling operations affect the landowners leases and encouraged the people to visit the company’s headquarters in Towanda for more information.