Friday, June 4, 2010

PA Regulators Confirm Blowout of Containment of $EOG Gas Well

  NEW YORK (Dow Jones)--Pennsylvania environmental regulators Friday confirmed that a natural-gas well in the western
half of the state owned by EOG Resources Inc. (EOG) blew out around 8 p.m. EDT Thursday. The well was shut in and
secured at around 12:15 p.m. Friday, EOG said.
  A spokeswoman for EOG Resources said in an email that a service rig operated by a contractor was in the final stages
of completing the well when the "control issue" occurred. There have been no reported injuries. The Pennsylvania
Department of Environmental Protection said natural gas and drilling fluid were released onto the ground and 75 feet
into the air. The incident, which took place in Clearfield County, about 11 miles from Penfield, Pa., was reported
earlier by local media and the Associated Press.
  Well operators were drilling to tap gas from the Marcellus Shale, a vast and deeply buried rock formation underlying
Pennsylvania, New York and several other states. The Marcellus Shale has proven to be a prolific source of gas, which is
accessed by a drilling method called hydraulic fracturing, whereby millions of gallons of drilling fluid are injected
at high pressure to crack open the shale rock. The rapid expansion of drilling in the Marcellus Shale has raised
concerns among environmentalists and some local groups who fear groundwater could be tainted by the chemical-laden
drilling fluids.
  "Right now, we're focused on limiting any further environmental damage, but once that work is complete, we plan to
aggressively look at this situation and see where things went wrong and what enforcement action is necessary," said
Pennsylvania DEP Secretary John Hanger, in a press release.
  Shares of Houston-based EOG were recently down 6.4% at $102.76 on the New York Stock Exchange.

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