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Top 5 stories of the week

Here are the top five stories from Marcellus.com for the week of November 17 through November 21.

1. Kittanning companies take gas drilling in a different direction

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Work is ramping up at an East Franklin site that is home to Snyder Brothers’ and MDS Energy’s first horizontal Marcellus shale well in Armstrong County.

A large rig has been set up and is expected to start drilling Saturday. Crews drilled vertical wells at the site earlier in the month.

The horizontal wells, while more costly to set up, produce significantly more gas, according to MDS spokesman Michael Knapp. Read more.

2. ‘Consolidation’ might be the word for some shale companies

oil pumps at night

The for-sale sign WPX Energy Inc. recently put on its Marcellus shale wells and land could signal more moves among natural gas producers struggling with low prices, observers say.

“I do know a couple of companies that are interested in getting out of the basin,” Lou D’Amico, president of the Marshall-based Pennsylvania Independent Oil & Gas Association, said Tuesday. He would not name those companies.

Don’t expect a wide-scale abandonment of the country’s most productive gas region, though, despite lower prices here, analysts said. Established companies can power through the tough market by increasing production until a glut eases or rely on production of liquids such as ethane or propane. Read more.

3. Fracking industry suing over drilling bans

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As fracking spreads in the United States, voters in more and more cities are banning drilling, waste disposal and other practices associated with deep-shale oil and gas wells.

But those bans have prompted lawsuits filed by state governments or the oil and gas industry raising a legal question: Who gets to say where fracking can happen?

“The Ohio legislature made it very clear that the state, not the local governments, controls this type of activity,” said John Keller, a Columbus lawyer who is representing Beck Energy Corp. of Ravenna in a lawsuit filed against the city of Munroe Falls in Summit County. Read more.

4. WPX to divest from Marcellus Shale as profiting from gas proving more difficult

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WPX Energy Inc. will divest from the Marcellus Shale with no plans to drill any new wells in Pennsylvania for the foreseeable future.

The Tulsa-based company spun off from Williams Companies Inc. in 2011. Its new CEO, petroleum engineer Rick Muncrief, joined the company in May and took a hard look at WPX’s assets, spokeswoman Susan Oliver said.

WPX will now focus on developing its acreage in the oil and natural gas liquids fields of Colorado, North Dakota and New Mexico, she said. Read more.

5. Federal advisory warns against pipeline reversals

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In a recent advisory, federal regulators are warning that reversing the flow of oil and gas pipelines or changing the product they carry could have a major impact on a line’s safety and integrity.

This is the first time the Pipeline and Hazardous Materials Safety Administration (PHMSA), a division of the Department of Transportation, has formally warned the industry about the potential safety hazards that come with restarting or reworking pipelines to, for example, transport Canadian tar sands oil and the increasing glut of domestically produced shale oil and gas. The notice states that if these changes are not handled properly the likelihood of pipeline ruptures and leaks is increased. Read more.

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