Friday, September 04, 2009

Burgh Energy Report: Breaking News

I'm forgoing my weekly report to share some breaking news:

Epsilon Energy Ltd., a junior natural gas producer based in the Toronto area, says it is cutting its production nearly in half because of low prices. ...

... Effective immediately, Epsilon said it has shut in the Poulsen 1H well in Pennsylvania and curtailed the natural gas production from the Poulsen 2H.

The wells are part of the company's so-called Highway 706 project, which targets the Marcellus shale gas formation that runs through Pennsylvania and into New York state.

Looks like the supply glut is beginning to affect production. Regardless, interest in the energy play remains strong. From DuBois, PA:

"We get calls every day - from Texas, Oklahoma, Wyoming, Colorado, Utah - looking for homes for workers, looking for places to stage their equipment, where to find water," Castonguay said. "I asked them, why would you come to the DuBois area. They said when they looked at the transportation system along this shale plain, this is where we need to be to adequately move it out."

To ready itself for the impending boom, Sandy Township is reviewing its zoning ordinance and doing a complete rewrite to accommodate the needs of gas well drillers.

The bets are more long term and a large influx of workers seems inevitable. The rush isn't on as of yet, but it is coming.

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