SRBC Announces Streamlined Permitting Process for Consumptive Water Use

The Susquehanna River Basin Commission announced today that the permitting process for consumptive use of water from the basin has been streamlined. Among the streamlining provisions in the amended regulations, all requests for consumptive water use by the national gas industry will now be handled through SRBC’s simplified approval-by-rule process (commonly known as a general permit). To make this change possible, SRBC likewise expanded the sources of water that applicants can consider for their consumptive water use, including public water supplies, discharges from wastewater treatment facilities and other reclaimed waters, and withdrawals from other sources approved separately by SRBC.

Other key changes in SRBC’s regulations include:
- Regulating projects on a drilling-pad basis.
- Requiring project sponsors to certify compliance with state and/or federal laws for the treatment and disposal of flowback fluids or produced brines.
- Incorporating the August 14, 2008 determination by the SRBC Executive Director (which went into effect on October 15, 2008) that all quantities of water withdrawn or used for natural gas well development be reviewed.
- Limiting SRBC’s approval to five years versus the standard approval of 15 years for other types of projects.

The regulatory amendments will go into effect January 1, 2009, or when they have been published as final in appropriate federal and state registers, whichever comes later.

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Rex Energy Updates Marcellus Drilling

Rex Energy today announced the completion of two vertical Marcellus Shale wells in Westmoreland County, Pennsylvania. The wells were drilled in the deeper portion of the Marcellus play and had peak flow rates of 400 and 1,200 Mcf per day respectively before being turned in. Each well continues to stabilize at daily production rates of 300 - 500 Mcf per day. The 800 mcfd average IP is considerably lower than the 2,100 mcfd rates reported last week by Atlas Energy for its latest verticals, but Rex expects to be able to increase production with further optimzation. A third vertical in the county will be completed later this month.

Citing the need to maintain a balance between liquidity and exploration, the company also annouced a reduction in 2009 capex to US$49mm, 70% of which will be directed into the Marcellus Shale. Expectations are for completions of 6-8 horizontals in 2009.

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