Chief Oil and Gas
Encyclopedia
Chief Oil & Gas was founded in Dallas, Texas in 1994 by President and CEO Trevor Rees-Jones. Its primary holdings of natural gas
were developed in the core areas of the Barnett Shale
in Tarrant County, Denton County and Parker County. In 1999, new technology in horizontal drilling and hydraulic fracturing
along with rising gas prices made the Barnett Shale
, an unconventional resource for natural gas, more economical. Chief rapidly expanded its leasehold position and drilling
and production program in the Barnett Shale
to become the fields second largest producer there.
After selling, in 2006, the majority of its leasehold and production assets to Devon Energy
and its pipeline and midstream
assets to Crosstex Energy for $2.63 billion, Chief entered the Marcellus Formation
gas play in Appalachia
, with its primary leasehold position in Pennsylvania
, West Virginia
and New York. Chief drilled their first Marcellus Shale gas well in Lycoming County
, Pennsylvania in Watson Township
in the fall of 2007. The company also has a leasehold position in the Utah Thrust Belt in central Utah
with development expected to begin in 2009.
Quicksilver Resources Inc., a Fort Worth based company, purchased another portion of Chief’s Barnett Shale holdings in July 2008. Quicksilver purchased natural gas producing properties in Tarrant and Denton counties from several companies including Chief Oil & Gas LLC, Hillwood Oil & Gas LP and Collins and Young LLC for $1.3 billion.
In December 2010, Chief entered into an asset purchase and sale agreement to sell certain natural gas properties in the Marcellus Shale to EXCO Holding PA, a subsidiary of EXCO Resources Inc., for approximately $459 million. The sale assets include 15 producing wells, 11 wells waiting on completion and approximately 50,000 net acres located in Lycoming, Sullivan and Columbia counties in Pennsylvania.
plays in the United States. Advances in the technology of 3-D
seismic imaging, drilling
and completion technology, including hydraulic fracturing
techniques has enabled Chief to produce gas from the low permeability Barnett Shale
and Marcellus Shale that otherwise would not be economically feasible.
Technology has also helped Chief reduce the size of the footprint
on the environment
. The size of a drill site today has been reduced significantly compared to 50 years ago. Horizontal
drilling
has made a significant contribution to reducing the company's footprint on the environment. Horizontal drilling
technology enables operators to reach their target site and avoid environmentally difficult areas. It also allows multiple wells to be drilled from the same pad site
which not only reduces the environmental impact, but the cost to drill.
In September 2008, Chief unveiled a first of its kind drilling rig
designed specifically for drilling
horizontal wells in the rugged terrain of the Marcellus shale. The 1,600-horsepower rig is quieter, gives off fewer emissions, is safer to operate and can be broken down and carted off quickly.
2009 donations include:
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
were developed in the core areas of the Barnett Shale
Barnett Shale
The Barnett Shale is a geological formation located in the Bend Arch-Fort Worth Basin. It consists of sedimentary rocks of Mississippian age in Texas...
in Tarrant County, Denton County and Parker County. In 1999, new technology in horizontal drilling and hydraulic fracturing
Hydraulic fracturing
Considerable controversy surrounds the current implementation of hydraulic fracturing technology in the United States. Hydraulic fracturing, or fracking, is the process of utilizing pressurized water, or some other liquid, to fracture rock layers and release petroleum, natural gas, or other...
along with rising gas prices made the Barnett Shale
Barnett Shale
The Barnett Shale is a geological formation located in the Bend Arch-Fort Worth Basin. It consists of sedimentary rocks of Mississippian age in Texas...
, an unconventional resource for natural gas, more economical. Chief rapidly expanded its leasehold position and drilling
Drilling
Drilling is a cutting process that uses a drill bit to cut or enlarge a hole in solid materials. The drill bit is a multipoint, end cutting tool...
and production program in the Barnett Shale
Barnett Shale
The Barnett Shale is a geological formation located in the Bend Arch-Fort Worth Basin. It consists of sedimentary rocks of Mississippian age in Texas...
to become the fields second largest producer there.
After selling, in 2006, the majority of its leasehold and production assets to Devon Energy
Devon Energy
Devon Energy Corporation , is among the largest U.S.-based independent natural gas and oil producers. Based in Oklahoma City, Oklahoma, the company's operations are focused on North American onshore exploration and production...
and its pipeline and midstream
Midstream
The petroleum industry is usually divided into three major components: upstream, midstream and downstream. Midstream operations are usually included in the downstream category....
assets to Crosstex Energy for $2.63 billion, Chief entered the Marcellus Formation
Marcellus Formation
The Marcellus Formation is a unit of marine sedimentary rock found in eastern North America...
gas play in Appalachia
Appalachia
Appalachia is a term used to describe a cultural region in the eastern United States that stretches from the Southern Tier of New York state to northern Alabama, Mississippi, and Georgia. While the Appalachian Mountains stretch from Belle Isle in Canada to Cheaha Mountain in the U.S...
, with its primary leasehold position in Pennsylvania
Pennsylvania
The Commonwealth of Pennsylvania is a U.S. state that is located in the Northeastern and Mid-Atlantic regions of the United States. The state borders Delaware and Maryland to the south, West Virginia to the southwest, Ohio to the west, New York and Ontario, Canada, to the north, and New Jersey to...
, West Virginia
West Virginia
West Virginia is a state in the Appalachian and Southeastern regions of the United States, bordered by Virginia to the southeast, Kentucky to the southwest, Ohio to the northwest, Pennsylvania to the northeast and Maryland to the east...
and New York. Chief drilled their first Marcellus Shale gas well in Lycoming County
Lycoming County, Pennsylvania
-Appalachian Mountains and Allegheny Plateau:Lycoming County is divided between the Appalachian Mountains in the south, the dissected Allegheny Plateau in the north and east, and the valley of the West Branch Susquehanna River between these.-West Branch Susquehanna River:The West Branch of the...
, Pennsylvania in Watson Township
Watson Township, Lycoming County, Pennsylvania
Watson Township is a township in Lycoming County, Pennsylvania, in the United States. The population was 550 at the 2000 census. It is part of the Williamsport, Pennsylvania Metropolitan Statistical Area.-History:...
in the fall of 2007. The company also has a leasehold position in the Utah Thrust Belt in central Utah
Utah
Utah is a state in the Western United States. It was the 45th state to join the Union, on January 4, 1896. Approximately 80% of Utah's 2,763,885 people live along the Wasatch Front, centering on Salt Lake City. This leaves vast expanses of the state nearly uninhabited, making the population the...
with development expected to begin in 2009.
Quicksilver Resources Inc., a Fort Worth based company, purchased another portion of Chief’s Barnett Shale holdings in July 2008. Quicksilver purchased natural gas producing properties in Tarrant and Denton counties from several companies including Chief Oil & Gas LLC, Hillwood Oil & Gas LP and Collins and Young LLC for $1.3 billion.
In December 2010, Chief entered into an asset purchase and sale agreement to sell certain natural gas properties in the Marcellus Shale to EXCO Holding PA, a subsidiary of EXCO Resources Inc., for approximately $459 million. The sale assets include 15 producing wells, 11 wells waiting on completion and approximately 50,000 net acres located in Lycoming, Sullivan and Columbia counties in Pennsylvania.
Technology
Chief Oil & Gas develops natural gas from shale gasShale gas
Shale gas is natural gas produced from shale. Shale gas has become an increasingly important source of natural gas in the United States over the past decade, and interest has spread to potential gas shales in the rest of the world...
plays in the United States. Advances in the technology of 3-D
3D computer graphics
3D computer graphics are graphics that use a three-dimensional representation of geometric data that is stored in the computer for the purposes of performing calculations and rendering 2D images...
seismic imaging, drilling
Drilling
Drilling is a cutting process that uses a drill bit to cut or enlarge a hole in solid materials. The drill bit is a multipoint, end cutting tool...
and completion technology, including hydraulic fracturing
Hydraulic fracturing
Considerable controversy surrounds the current implementation of hydraulic fracturing technology in the United States. Hydraulic fracturing, or fracking, is the process of utilizing pressurized water, or some other liquid, to fracture rock layers and release petroleum, natural gas, or other...
techniques has enabled Chief to produce gas from the low permeability Barnett Shale
Barnett Shale
The Barnett Shale is a geological formation located in the Bend Arch-Fort Worth Basin. It consists of sedimentary rocks of Mississippian age in Texas...
and Marcellus Shale that otherwise would not be economically feasible.
Technology has also helped Chief reduce the size of the footprint
Footprint
Footprints are the impressions or images left behind by a person walking. Hoofprints and pawprints are those left by animals with hooves or paws rather than feet, while "shoeprints" is the specific term for prints made by shoes...
on the environment
Natural environment
The natural environment encompasses all living and non-living things occurring naturally on Earth or some region thereof. It is an environment that encompasses the interaction of all living species....
. The size of a drill site today has been reduced significantly compared to 50 years ago. Horizontal
Horizontal plane
In geometry, physics, astronomy, geography, and related sciences, a plane is said to be horizontal at a given point if it is perpendicular to the gradient of the gravity field at that point— in other words, if apparent gravity makes a plumb bob hang perpendicular to the plane at that point.In...
drilling
Drilling
Drilling is a cutting process that uses a drill bit to cut or enlarge a hole in solid materials. The drill bit is a multipoint, end cutting tool...
has made a significant contribution to reducing the company's footprint on the environment. Horizontal drilling
Drilling
Drilling is a cutting process that uses a drill bit to cut or enlarge a hole in solid materials. The drill bit is a multipoint, end cutting tool...
technology enables operators to reach their target site and avoid environmentally difficult areas. It also allows multiple wells to be drilled from the same pad site
Pad site
A pad site is a freestanding parcel of commercial real estate located in the front of a larger shopping center or strip mall. Desirable because of their visibility to consumers, accessibility, and the ease of facilitating drive-thru service, pad sites are typically sought after by banks, casual...
which not only reduces the environmental impact, but the cost to drill.
In September 2008, Chief unveiled a first of its kind drilling rig
Drilling rig
A drilling rig is a machine which creates holes or shafts in the ground. Drilling rigs can be massive structures housing equipment used to drill water wells, oil wells, or natural gas extraction wells, or they can be small enough to be moved manually by one person...
designed specifically for drilling
Drilling
Drilling is a cutting process that uses a drill bit to cut or enlarge a hole in solid materials. The drill bit is a multipoint, end cutting tool...
horizontal wells in the rugged terrain of the Marcellus shale. The 1,600-horsepower rig is quieter, gives off fewer emissions, is safer to operate and can be broken down and carted off quickly.
Donations
- In October 2010, Chief Oil & Gas donated $50,000 to now acting governor, Tom CorbettTom CorbettThomas W. Corbett is the 46th and current Governor of the Commonwealth of Pennsylvania, United States. He is a former Attorney General of Pennsylvania and was elected to that office in 2004 and reelected in 2008...
, which some believe was a payoff in exchange for no severance tax and the repeal of environmental policies created to protect the environment from natural gas drilling.
- In July 2008, Chief Oil & Gas donated $25,000 to the Lycoming CountyLycoming County, Pennsylvania-Appalachian Mountains and Allegheny Plateau:Lycoming County is divided between the Appalachian Mountains in the south, the dissected Allegheny Plateau in the north and east, and the valley of the West Branch Susquehanna River between these.-West Branch Susquehanna River:The West Branch of the...
4-H program to help community 4-Hers with financial needs.
2009 donations include:
- $50,000 donation to the United Way Home Heating Assistance Program to help families struggling to pay their home heating bills. The donation benefited families in Bradford, Cambria, Clearfield, Fayette, Lycoming, Somerset and Susquehanna Counties. The funds were distributed by nonprofit organizations responsible for home heating assistance in each county.
- $134,000 donation to fund the expansion of a mentoring program for at-risk youth in Pittsburgh Public Schools. The company committed a total of $402,000 over a three year period to the Learning and Mentoring Partnership (LAMP), which is operated by Pittsburgh Public Schools, Family Guidance Inc., and area churches.
Environmental record
- In January 2011, The Department of Environmental ProtectionPennsylvania Department of Environmental ProtectionThe Pennsylvania Department of Environmental Protection was established on July 1, 1995, is the agency in the U.S. State of Pennsylvania responsible for protecting and preserving the land, air, water, and energy resources through enforcement of the State's environmental laws...
imposed a $34,000 fine on Chief Gathering LLC, of Dallas, Texas-a subsidiary of Chief Oil and Gas-for illegally discharging hydrostatic testing water at a pipeline project in Penn Township, Lycoming County, in August 2010. DEP inspectors determined that 21,000 gallons of hydrostatic testing water remained in storage on-site, but that an additional 25,200 gallons had already been discharged to the Big Run watershed.
- In the first six months of 2010, Chief Oil & Gas was cited for 78 violations by the Pennsylvania DEP, more than any other Marcellus shale driller in the state and with the highest ratio of violations at 3.5 per well.
- In June 2010, a well blowout and fire at a Chief-owned site injured seven contractors in Moundsville, West Virginia, and burned for days. No one from the emergency response crews had been given instruction on how to fight a well blowout and the burning site was found abandoned when the responders arrived.
- Chief is part of an industry consortium of producers that organized the Appalachian Shale Water Conservation and Management Committee (ASWCMC) in the Spring of 2008 to address water issues long term. The ASWCMC has made a financial investment to research water recycling, treatment and minimum water quality needed for the hydraulic fracture stimulation process.