“These are the times that try men’s souls” wrote Thomas Paine in his pamphlet

“The Crisis” published on December 23, 1776. He was describing George

Washington’s retreat into Pennsylvania after a series of defeats in New York State.

Washington was masterful in his tactical retreats and preserved his army to strike

again, which he did when he crossed the Delaware River into New Jersey and

defeated British and Hessian forces at Trenton and Princeton. Now, 240 years

later, the situation in Pennsylvania again looks dire. This time what is threatened

is not an army, but the economic livelihood of American citizens who help produce

the oil and natural gas necessary for the wellbeing and maintenance of our society.

Conventional operators, already beset by low product prices and profit margins,

are now beset further with imminent new and costly regulations, which could

financially bankrupt many of them. Sound environmental stewardship is good

business and necessary for present and future public welfare. Local operators

know this as well as anyone. I believe that beneficial rules can be formulated

without regulating a historic, useful and necessary industry into economic

extinction. Please continue your support for industry groups working on behalf of

conventional operator to require the EQB and DEP to promulgate regulations for

the conventional industry that are actually necessary and practical.

Also, please consider reviewing the new Positions Wanted section on page two.

This newsletter would like to serve as an additional medium where experienced

workers, displaced by the current economic downturn, can have their

qualifications and contact information viewed. I will gladly accept entries for the

Positions Wanted section by email. Please provide your basic qualifications and an

email address or phone number where you can be reached.

In this issue

Paine was Right P.1 2016 Conv. Permits P.2

Positions Wanted P. 2 In the Spotlight P.3 Logging Assists p.5

About this Newsletter

“The Conventional Operator” is a

free, bimonthly publication of

StratResources Geologic Consulting,

LLC distributed via email. You may

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Comments are welcome. If at any

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Cary Kuminecz CPG, PG is President/

Owner of StratResources Geologic

Consulting, LLC which provides

prospect generation, geologic

property evaluation, and well log

scanning & digitization services for

the oil & gas industry and

landowners. For more information

and for past issues of this newsletter

please visit:

www.stratresourcesgc.com

The Conventional Operator

Bi-Monthly Newsletter for Operators Exploring & Developing Conventional Oil & Gas Plays in Pennsylvania

ISSUE 7 Mar 2016

Thomas Paine was Right

Source: Sam Kuminecz, Stick & Shutter Photography, 2016

2

Conventional Well Permits - Pennsylvania (2015—2016)

2016 has begun anemically for conventional well

permits. Only 17 new or renewal permits have been

approved in January and February compared to 107

for the same time period last year. This equates to

an 84% drop in conventional well permit activity.

The reason for the drop off remains the low price for

crude oil (currently $28.57 to $33.57/BO at ARG as of

3/3/2016) and natural gas (currently <$1.70/MCFG).

Hydrocarbon oversupply in the world and U.S.

markets is primarily to blame; and the warmer late

winter temperatures we are experiencing, compared

to previous years, has decreased natural gas

consumption and hindered some surface operations.

For example, in northern McKean County, February

2016 was more than twice as warm as the previous

February (see chart on the right).

2016 Conventional Well Permits Off to a Slow Start

Positions Wanted

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50

100

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350

400

450

500

0

10

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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Cu

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2015 Conventional Well Permits

2016 Conventional Well Permits

2015 Cumulative Conv Permits

2016 Cumulative Well Permits

Pennsylvania DEP

New or Renewed Conventional Well

Permits

Avg Daily Temperatures °F (PAMAR Station - McKean Co)

Yr Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2014 16 17 25 44 55 64 64 63 58 49 33 30

2015 16 10 27 43 29 62 65 64 62 47 42 39

2016 22 26

Geologist: Over seven years of experience in natural

gas exploration and development. Background in shale

evaluation, well planning, seismic interpretation,

geosteering, GIS and environmental science.

Contact: l.husser019@gmail.com for details and visit

http://tinyurl.com/HusserResume for resume (copy

and paste the url into your browser if it fails to open

from here)

3

2015 PA Production Stars Operators with best single conventional well spud

during 2015, and reporting production of at least

1000 BO or 6,000 MCFG

OIL:

Washington Co., Cross Creek Twp.

Range Resources Appalachia

(HZ well) - 4,335 BO

GAS:

Clarion Co., Farmington Twp.

Frederick Drilling Co. & Sons

(VT well) - 80,000 MCFG

Success Stories, Awards & Honors, Headlines

On February 3, 2016 the Environmental Quality

Board (EQB) approved the rewrite of Oil and Gas

Chapters 78 and 78a (DEP Title 25) governing the

surface operations and data management for

conventional and unconventional wells. The EQB

voted for the final draft of Chapters 78 and 78a in

spite of the recommendation of the Conventional Oil

and Gas Advisory Committee (COGAC) that approval

of the regulations be denied. COGAC argued that the

DEP failed to follow proper procedures in making the

new regulations; failed to adequately review data

provided by COGAC; and gave lip service to 2014

legislation which required separate rulemaking for

the conventional and unconventional oil and gas

industries in Pennsylvania. Conventional industry

groups are considering lawsuits to stop the

regulations from becoming

law.

The National Stripper Well Association

is having its First Annual Meeting April

14th-15th in Norman, OK. The agenda includes

Technologies for Enhancing Profitability, Financial

Management, and Oil & Gas Venture Financing.

http://nswa.us/page_images/1456757602.pdf

In January Governor Thomas

Wolf announced plans to

reduce methane emissions

from the oil and gas sector in PA in accordance with

new EPA rules being developed. According to the

Pennsylvania DEP, the new PA rules will have four goals

to be achieved through regulations and new permits:

1. Reduce leaks at new unconventional natural gas

well pads by requiring Best Available Technology

for equipment and processes, better record-

keeping, and quarterly monitoring.

2. Reduce leaks at new compressor stations and

processing facilities by requiring the use of Tier 4

diesel engines to reduce PM and NOx emissions.

3. Reduce leaks at existing oil and natural gas facilities

by developing new regulations for the

Environmental Quality Board to consider.

4. Reduce emissions along production, gathering,

transmission and distribution lines by establishing

best management practices for leak detection and

pipeline repairs.

Regulations related to Goals 3 and 4 may have the

most impact on conventional well operators. Rules for

existing wells and facilities will likely follow after those

for new wells and facilities are put into place.

4

5

Sometimes, after you reach your planned total depth and log the well you find a situation like the operator of

this logged shallow well. The logger’s TD on this well was 2,472’. With the triple-combo logging string used in

this well, the first Resistivity measurement is at TD; the first Density measurement is 17.7’ above TD; and the

first Gamma Ray measurement is 38.2’ above TD. The

log clearly shows a zone of low density from 2,438 to

2,454 feet with a corresponding high resistivity, which

likely indicates the presence of hydrocarbons; but the

reservoir was not imaged by the Gamma Ray log

whose first reading was also at 2,438 feet. The

operator likely didn’t have a representative at the well

during logging. Had this been the case the operator

could have requested that the logging company break

down the tool string and make a second logging run

with just the Gamma Ray tool. This is known as a

“barefoot” Gamma Ray. Gamma Ray tools will start

measuring within 1-3 feet of the bottom of the

wellbore if run separately. Had it been run In this case,

a “barefoot” Gamma Ray would have started imaging

the sandstone reservoir at approximately 2,470 feet.

The separate Gamma Ray curve can be displayed alone

or, with most modern logging software, can be merged

with the curves from the first logging run. It does take

an additional run and may require a company man or

consultant on site to review the first logging run when it comes up; but in this case, where the Resistivity and

Density logs indicated the presence of reservoir, a Gamma Ray curve would have been very useful to confirm

the presence of reservoir, calculate its thickness, and pick depths to notch and frac.

How did the operator get in this situation illustrated above? It may be that he didn’t know about the sand near

TD or didn’t allow for drilling sufficient rathole to be able to image the zone during the first logging run. Or

sometimes Mother Nature just gives you a gift; the “barefoot” Gamma Ray helps you to see it.

Well Logging Assists

Most issues of The Conventional Operator will devote an article to

tips and advice regarding collecting and using well log data.

Topic #7 - Running the “Barefoot” Gamma Ray

6

Providing Geologic Consulting Services to the

Oil & Gas Industry and Landowners

Oil & Gas Prospect Generation

Evaluation of Properties for Water Injection or Disposal

Acreage Hydrocarbon Assessments/Property Risk Management Assessment

Quantitative Well Log Analysis

Core Descriptions

Well Log Quality Control at the Wellsite

Volumetric Reserve Estimates

Oil & Gas Data Compilations and Reporting

Subsurface Geologic Reports/Interpretation of 3rd Party Reports

Conversion of Paper Well Logs into Raster Format (TIF) or Vector Format (LAS) Files

Training Classes in Stratigraphy of the Northern Appalachian Basin

www.stratresourcesgc.com