WHEELING - After paying $5 billion to acquire West Virginia leasehold acres from Chesapeake Energy, Southwestern Energy can now drill Marcellus shale wells with the same Department of Environmental Protection permits.
On Wednesday, Gov. Earl Ray Tomblin signed a bill into law that will allow Southwestern to proceed with fracking activity on the acreage the company purchased from Chesapeake last year without spending time or money applying for new permits. The new law applies to any company making a similar acquisition.
"This bill streamlines the transfer process of well work permits, not only supporting ongoing business operations and major investments, but to secure opportunities for hardworking West Virginians to find good paying jobs in this growing industry," Tomblin said.
"I'm proud of our ability to pass this important legislation so quickly, and with unanimous bipartisan support," state Senate President Bill Cole added. "We all want to work together to improve West Virginia's business climate."
Since purchasing the acreage from Chesapeake last year, Southwestern officials have been working to transfer the lease documents at courthouses across northern West Virginia. The company also announced plans to spend an additional $2.6 billion for drilling and fracking this year, despite lower selling prices for oil and natural gas.
"Almost everyone agrees demand will continue to grow through the end of the decade, mainly driven by new power generation and exports, but also including additional industrial growth that takes advantage of the lower energy costs compared to the rest of the world," Southwestern Chairman and CEO Steve Mueller said.
Jeff Sherrick, Southwestern executive vice president for exploration and business development, estimates the company can drill another 2,550 Marcellus wells on the former Chesapeake acreage.
"Southwestern Energy is delighted to have more than 80 West Virginians already working on our behalf, and we are looking to bring on more as we ramp up business here," Southwestern Executive Vice President and Chief Operating Officer Bill Way said.
Way recently said the company plans to drill about 70 wells in northern West Virginia this year in an area ranging from Brooke County in the north to Tyler County in the south and Monongalia County in the east. He said the firm plans on paying an average of $9 million to drill and frack each of these horizontal wells.
"For years, we've worked hard to make West Virginia not only a wonderful place to call home, but a good place to do business and a great place to make an investment," Tomblin said. "Many of the changes we made have had a direct impact on the continued growth and development of our state's abundant natural resources, including the Marcellus and Utica shale."