Drilling Generates 48,000 Jobs

- Drilling Generates 48,000 Jobs

Friday, June 03, 2011
Knight Ridder/Tribune Business News
by Joe Napsha, The Pittsburgh Tribune-Review

The boom in Marcellus shale natural-gas exploration and production created 48,000 jobs in Pennsylvania during the past 18 months, says a new state report.

"The numbers are absolutely staggering. We certainly project the jobs will grow as production continues to expand," said Travis Windle, a spokesman for the trade group Marcellus Shale Coalition in Cecil in Washington County.

The state's basic natural-gas exploration and production industries -- along with an extensive supply-chain network and support industry -- created the 48,000 jobs from October 2009 through this March, according to the report by the state Department of Labor and Industry. The total included hiring for 9,000 jobs during the three months ended March 31.

Of the 48,000 new jobs, about 71 percent were filled by Pennsylvania residents, the state said in a separate report.

"We have already seen tens of thousands of new jobs in Pennsylvania from the industry itself, as well as from new industries spawned to support it," state Department of Environmental Protection Secretary Michael Krancer said in testimony Thursday before the Congressional Natural Gas Caucus in Washington, D.C.

"These are good-paying jobs in many fields," Krancer said.

The study, the first issued by the state to summarize the impact of the Marcellus shale boom, backs up the wages.

The report shows that the average wage last year for jobs in the basic gas industry was $69,995, while the average wage in support industries -- such as construction, steel and engineering -- was $63,967. That compares with an average wage for all industries in the state of about $45,491.

Total employment in industries connected to Marcellus shale drilling and production was 141,000 workers as of Sept. 30, the state said. The figure represents 2 percent of total state employment.

Armstrong, Beaver, Butler, Fayette, Greene, Indiana, Washington and Westmoreland counties had about 5,280 jobs created during the 18-month period, most of which were in support industries. During that time, 371 Marcellus shale wells were drilled in those eight counties.

Employment in six basic natural-gas industries -- such as drilling, pipe production, pipeline construction and gas transportation -- increased by almost 94 percent from 2008 to Sept. 30, the report shows.

The 21 support industries -- such as iron and steel mills; water supply; oil and gas machinery equipment manufacturing; site preparation; and environmental services -- had employment increased just 2 percent.

Beaver, Greene and Washington counties had 1,200 new employees hired in the support industries, the highest number in six state regions tracked in the report.

One of the largest gas producers, Range Resources Inc., has 5,000 employees in Western Pennsylvania and could double those numbers in the coming years, spokesman Matt Pitzarella said.

Another large producer in the state, Chesapeake Energy Corp., has 1,341 employees in the state, spokeswoman Jacque Bland said.

Gas industry employers are seeking workers, particularly those with training. Of 12 students who graduated two weeks ago from a training program at Westmoreland County Community College in Youngwood, five already have job offers, said Byron Kohut, director of the ShaleNet's Western Hub of training programs.

"We anticipate all of the students will get jobs," as mechanics and roustabouts, Kohut said.

The industry is projected to create 212,000 new jobs by 2020, according to a forecast by Penn State University experts. The forecast is based on natural-gas production of 13 billion cubic feet from more than 3,500 gas wells drilled in 2020, according to their study funded by the Marcellus Shale Coalition.

Job growth, however, depends upon the drilling volume and where the jobs are within the energy sector, said energy expert Kent F. Moors, a Duquesne University professor and director of Duquesne's Energy Policy Research Group.

Copyright (c) 2011, The Pittsburgh Tribune-Review

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New Oil Minister Likely to Represent Iran at OPEC Meeting

- New Oil Minister Likely to Represent Iran at OPEC Meeting

Friday, June 03, 2011
Dow Jones Newswires
by Benoit Faucon

Iran's new oil ministry caretaker is likely to represent Iran at the next meeting of the Organization of Petroleum Exporting Countries, a person familiar with the matter said Friday.

That would logically make him the chairman of the crucial oil policy meeting Wednesday in Vienna, with the Islamic Republic having assumed the group's rotating presidency this year.

Late Thursday, Iranian president Mahmoud Ahmadinejad appointed Mohammad Aliabadi as the caretaker of the oil ministry, bowing to parliamentary pressure against his previous decision to run the ministry himself.

Aliabadi, a close Ahmadinejad loyalist, is better known as the head of Iran's National Olympic Committee and as the former head of its National Sports Organization.

"He has worked closely with the president," the person said.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Atwood Aurora Contracted to Drill Offshore Cameroon

- Atwood Aurora Contracted to Drill Offshore Cameroon

Friday, June 03, 2011
Atwood Oceanics Inc.

Atwood Oceanics' subsidiaries has been awarded a contract by a subsidiary of Noble Energy for the Atwood Aurora. With contract commencement expected in October 2011, the award has an estimated firm duration of 240 days plus an option well with an estimated duration of approximately 40 days. The day rate for work offshore Cameroon will be approximately $126,000 and for work offshore Equatorial Guinea, the day rate will be approximately $134,000. With the award of this contract, the firm contractual commitments for the Atwood Aurora are expected to extend through May 2012.

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Corridor: Apache Canada Pulls Out Of New Brunswick Shale Opportunity

- Corridor: Apache Canada Pulls Out Of New Brunswick Shale Opportunity

Friday, June 03, 2011
Corridor Resources Inc.

Corridor Resources has received notification that Apache Canada has elected not to proceed with the second phase of the farm-out program with Corridor in respect of the potential shale gas resource development near Elgin, New Brunswick.

As was announced by Corridor on March 30, 2011, the two horizontal wells drilled and hydraulically fracture stimulated by Apache (Will DeMille G-59 and Green Road B-41), using similar large slick water techniques, have not generated sustained shale gas production to date. In May, the Will DeMille G-59 well was re-opened and flowed frac fluid at low rates with minor gas shows over 5 days. It is important to note that, when the Will DeMille G-59 well was shut-in after initial testing in early December, 2010, it had recovered only approximately 4% of the total frac fluid.

Corridor previously reported that the Green Road B-41 well had been placed on a 45 day gas lift which ended on March 16, 2011. At that time, the well was shut-in after recovering 17% of the frac fluid. In late May, due to significant well head pressure build-up, the well was reopened and flowed gas at a maximum rate of 0.7 mmscf/d for several hours prior to frac fluids loading the well causing gas rates to decline.

Based on a consensus among third party expert consultants and Corridor technical staff, the most significant issues identified with the G-59 and B-41 well performance relate to the design of the horizontal wells in this high-stress environment and the fracture technique. Corridor believes that a different well design and frac program will lead to a commercial development of the Frederick Brook shale. It should be noted that, as previously reported, Corridor re-tested the Green Road G-41 well in December 2010, which produced gas at a constant rate of 4 mmscf/d for five days at a final flowing pressure of 1306 psi. During Q1 2011, the G-41 well was used to provide gas lift and consistently delivered the required rate of 0.5 mmscf/d during a 45 day test, at a final pressure of 2007 psi.

Corridor intends to drill two vertical appraisal wells in the Elgin area commencing late this year in order to confirm the well productivity required to proceed with a pilot phase. Based on the results of these appraisal wells, Corridor plans a staged approach to demonstrate commercial viability which would include a pilot phase with a capacity of approximately 40 mmscf/d, targeting gas production in late 2013. This program would include vertical wells in a multi-well pad design to take advantage of the shale thickness and the high gas saturations. During the pilot phase, Corridor will evaluate various drilling and completion techniques.

In addition, Corridor will entertain discussions with potential joint-venture partners who wish to engage in a program to develop the Frederick Brook shale and who can add value to the potential development. The information and data obtained to date from Corridor's and subsequent Apache programs will be of significant value as this program advances.

It is important to recognize that the evaluation of the Frederick Brook shale gas resources is still in its early stages, and that the best estimate of gross discovered resources is 67.3 trillion standard cubic feet (as estimated by GLJ Petroleum Consultants Ltd. in the GLJ shale resources report, effective June 1, 2009.)

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