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Oil has also been found in lesser quantities, but sufficient (with recent high oil prices) to be commercially viable. Oil and gas operations on leases that have been on production for extended time produce copious amounts of brine water along with the associated oil and gas. Produced water, (any water that is present in a reservoir with the hydrocarbon resource) is produced to the surface with the crude oil or natural gas. Oil production in Texas peaked in 1972 at 1.3 billion barrels per year; it has since declined 73 percent to 351 million barrels in 2004. Natural gas production peaked the same year but has declined only 39 percent, from 9.6 trillion cubic feet (Tcf) in 1972 to 5.9 Tcf last year.

Oil and gas is big business in Texas. Whether it is onshore or offshore, the oil and gas industry can be very dangerous at times. Oil (or in this case, natural gas) cannot move from the reservoir rock to the drilled wellbore unless there is an unobstructed pathway (a combination of porosity and permeability). Fractures offer such a pathway.

Gas well setup and initial drilling will produce about the same level of noise you’d hear near a typical construction site. Gas companies know the competition game well. The price companies offer land owners is not just based on the price of natural gas, Robbins said.

Natural gas drilling (where I currently reside) has brought an abundance of economic rewards to the area. Although there are definitely down sides to the drilling, this can be offset by investing the rewards properly. Natural gas doesn’t exist in large underground caverns, just as oil doesn’t come from giant underground lakes. Both oil and gas are found in tiny holes called pores found in certain types of rock.

Devon has drilled more than 1,300 wells into the Barnett Shale since 2002 and has produced more than 800 billion cubic feet of natural gas equivalent. Use of fracturing technology has helped Devon increase its Barnett production from 200 million cubic feet of natural gas equivalent per day in 2002 to more than 600 million today. Devon Energy has commissioned its own study to see what effects the well drilling is having on the aquifer. They are also contracted with us to recycle the water from each new well that is drilled and they drill around 27 each 30 days.

McElreath says his crews didn’t have any problems boring through the hard rock and exiting on the other side of the drainage culvert. He says they used Baroid BORE-GEL™ and pre-reamed with a 14-inch backreamer before pulling back the 8-inch steel pipe. McElreath said they typically turn to the D100×120 when installing large pipe and boring more than 800 ft.

Development of these leases is anticipated to commence in mid-2006 with Wynn Crosby Energy as operator. Recently, Calibre acquired 1,514 net acres in the core area of the Barnett Shale outside of the areas covered by the Reichmann and Kerogen joint ventures. Development costs for the proved undeveloped reserves are estimated at .96 per Mcf. Including these future drilling costs, the fully developed price paid increases to 1.90 per Mcf, excluding any upside potential.

Production data from just a handful of wells are public. A couple of wells have been unsuccessful, but at least two are producing more than two million cubic feet of gas a day, comparable to a well in the Fort Worth Barnett Shale. Production decline curves have been compiled for every Barnett producer and estimated ultimate recoveries estimated using consistent decline analysis methods. Production from the Canyon sands began in the early 1950’s and the field was unitized for waterflooding in 1963. Many of the wells were shut-in or abandoned due to mechanical failure.

Production sites will be monitored daily by the production company and will be inspected regularly by the City. A six to eight foot masonry wall and landscaping will surround the wells for safety and to screen them from the public view after they are put into production.

Horizontal drilling is often used with shale gas wells. Horizontal drilling has changed the way oil and gas drilling is done by allowing producers to drill horizontally beneath neighbourhoods, schools and airports. Since much of the gas in the Barnett Shale is lodged beneath the City of Fort Worth, this new drilling technology has created a boom for the city.

Fractures offer such a pathway. Some years ago, there was a lot of hype about another Texas play, the Austin Chalk which is a carbonate reservoir rock that has an extensive network of natural fractures . Fracturing involves the injection of water and sand into a well after it has been drilled, creating pencil-thin cracks in the shale to facilitate gas flow.

Investors are directed to consider such risks and other uncertainties discussed in documents filed by the Company with the Securities and Exchange Commission. Investors are urged to consider closely the disclosure in EOG’s Annual Report on Form 10-K for fiscal year ended December 31, 2006, available from EOG at P.O. You can also obtain this form from the SEC by calling 1-800-SEC-0330 or from the SEC’s website at www.sec.gov .

Right now, the shale is producing nearly two billion cubic feet every day?enough natural gas to meet the needs of 9.2 million homes. And when it comes to machines and engines doing the work, customers are overwhelmingly choosing Cat. Rig count is expected to continue increasing gradually with a goal of having 10 rigs operating by the end of 2006. The company’s Cowtown natural gas cryogenic plant is currently in “start-up” phase and will be fully operational within the first quarter of 2006.

Chesapeake is currently using 38-40 operated rigs to further develop its 255,000 net acres of leasehold in the Barnett Shale play. At this pace of drilling, Chesapeake expects to be completing, on average, a new Barnett Shale well approximately every 15 hours through at least 2010. Chesapeake said it will spend an additional $275 million in 2008 and $675 million in 2009. That spending may be funded through public capital markets instead of the financial markets due to the current economic environment, according to the company.