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Science/Tech See other Science/Tech Articles Title: Arkansas sees spurt of interest in natural gas exploration LITTLE ROCK (AP) — From north-central Arkansas to the Mississippi River, companies are investing hundreds of millions of dollars to drill wells. They are looking for natural gas, and dozens of new wells already are producing it. The target of all the drilling is a geologic formation called Fayetteville Shale. The formation, a fine-grained rock that splits easily, is about 300 million years old. Until recently, shale wasn't viewed as a reservoir for gas production because it's so tightly packed. But companies have found a technology that fractures shale and releases the gas. That's started a rush on leasing mineral rights from Arkansas farmers and rural residents, and 20,000 wells may eventually be drilled in the Fayetteville Shale, according to one energy company's prediction. "This is just an opportunity for a swath of the state that just, I don't think, ever had any suspicions that oil and gas was something that was going to be meaningful in their area, said Tom Price Jr., senior vice president of corporate development at Chesapeake Energy Corp. In White County, some company representatives were in such a hurry to gather information on land ownership that they damaged county books and documents, County Clerk Tanya Burleson said. That prompted Burleson to issue a memo: "Our books are old and need to be handled with care." Southwestern Energy Company, based in Houston, started the rush in 2001 when it realized it could use unconventional drilling techniques to tap gas trapped in the shale. Southwestern injects a mix of water, nitrogen and sand into a well at high pressure. "Our technology now let's us break it open and produce it, and that's what we're doing," said John Thaeler, senior vice president at Seeco Inc. in Fayetteville, a Southwestern subsidiary. Some of the company wells now are extracting gas from a mile or more below the surface. In all, leases obtained by Southwestern and Oklahoma City-based Chesapeake Energy cover about 4.5 percent of Arkansas. Southwestern, which also owns Arkansas Western Gas Co., a utility that serves northwest Arkansas, says it has 860,000 acres leased, largely in Conway, Cleburne, Faulkner, Franklin and Van Buren counties. The company plans to spend $338.3 million this year, drilling 175 to 200 wells in the shale area. As of mid-December, Southwestern had drilled 80 wells and was a partner in two others, the company said. Fifty-three wells were producing, and 11 were being completed or waiting to be hooked to a pipeline. Thaeler said Southwestern has opened an office in Conway and expects to have about 150 employees there this year. The Conway economy also stands to gain from Schlumberger, a major drilling equipment and technology company that is building a regional office and warehouse there. The complex is expected to open by mid-year and employ more than 100 people. Chesapeake has leased about 750,000 acres, including land in Cleburne, Faulkner, Lee, Pope, St. Francis, Van Buren and Woodruff counties. Woodruff County government leases the mineral rights for 162 acres to Chesapeake for $275 an acre and a 15 percent royalty, County Judge William Simmons said. "We've always had the feeling that there was probably gas underground in Woodruff County," Simmons said. David Fowler, 63, a farmer who lives near Brinkley, leases mineral rights to Maverick Oil and Gas on about 3,300 acres in St. Francis and Woodruff counties for $275 an acre, plus a 15 percent royalty on any gas recovered. He said he plans to continue producing rice and soybeans on the land, although he looks forward to the potential income from natural gas.
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