Cabot Oil & Gas Responds to Pennsylvania Department of Environmental Protection Order

September 28, 2009 Filed Under: Oil and Gas  

Cabot Oil & Gas Corporation reported on its remediation of three frac fluid releases at its Heitsman 4H Well location in Dimock Township, Susquehanna County, Pennsylvania. As reported to the Pennsylvania Department of Environmental Protection (PADEP), on September 16, 2009 during fracing operations being performed by Cabot contractors, Baker Corporation and Halliburton, there were two releases of frac fluid for a total of approximately 7980 gallons, some of which entered Steven’s Creek. The frac fluid is 99.5% fresh water and 0.5% gel. This mixture is not hazardous or dangerous.

Cabot has determined these releases were caused by failed piping connections between the frac tanks holding a fresh water supply and the equipment used to pump the fluid into the shale formation located more than a mile underground. Also as reported to the PADEP, on September 22, 2009 a release of frac fluid occurred on the same location of approximately 420 gallons. Cabot has determined this release was caused by a pressure surge which caused a hose to rupture.

After each event, and in conjunction with the PADEP, Cabot immediately mobilized a crew to pump the released fluid into on-site storage tanks and clean up any remaining fluid. Water and sediment samples were taken by Cabot at Steven’s Creek, after flushing operations, on September 17, 2009 and again on September 22, 2009. Results obtained to date confirm that remediation efforts have been successful. Dan O. Dinges, Chairman, President and CEO of Cabot, stated “Cabot has a zero tolerance for releases on Cabot properties, and takes its obligations very seriously in this regard. I am pleased with the remediation at the Heitsman 4H location, have been advised that minimal impact resulted from the initial spill containment measures, and there is no further impact to the environment as a result of the releases.”

Cabot is working with Halliburton and Baker to fully determine the cause of the releases and the appropriate additional measures to prevent reoccurrence in the future. Despite Cabot’s positive working relationship with the PADEP field personnel with whom Cabot interacts on a daily basis, Cabot received an Order from the Environmental Program Manager, Oil and Gas Management of the PADEP, located in Williamsport, Pennsylvania, to temporarily cease all hydraulic-fracturing/well stimulation operations in Susquehanna County, Pennsylvania until there is a full review of the incidents.

Dinges stated, “Cabot is disappointed by the PADEP’s issuance of this Order. Based on the facts as we know them, we disagree with several of the allegations made in the Order. However, Cabot is fully committed to understanding the cause of these releases, improving our contractor’s procedures and to the timely resumption of our fracing operations, all of which we will communicate to the market as new information becomes available. This Order has no impact on our drilling which will continue as planned, and there will be no disruption to existing production.”