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Environmental Protection Agency Signs Off On Hydraulic Fracturing By Brandon Davis

One of the most contentious issues surrounding the process of hydraulic fracturing (commonly called “fracking”) is the belief that it leads to groundwater contamination. Yet, according to Environmental Protection Agency Administrator Lisa Jackson, the process “is perfectly capable of being clean.” Moreover, she agrees with U.S. President Barack Obama in that hydraulic fracturing can benefit the economy through job creation without sacrificing the environment.

Despite these and other compelling arguments, fears surrounding the procedure continue to drive a wedge between citizens, legislators, and gas-extracting operators. Nowhere has this confrontation been clearer than in New York State. Concerns about groundwater contamination in several towns have spurred the passage of recent anti-fracking legislation. The issue has become such a lightning rod that the New York Supreme Court recently ruled that local drilling in the town of Dryden should be prohibited. The ruling essentially constitutes a ban.

Below, Brandon Davis explain how hydraulic fracturing works, and present the concerns posed by critics of the procedure. He then takes a closer look at evidence suggesting their fears are unwarranted.

Brief Overview of Fracking: How It Works

The main purpose of fracking is to extract natural gas and oil from shale formations. The procedure represents a relatively recent advancement in technology, and has made gas and oil extraction economical. Back in the 1970s, before hydraulic fracturing was widely used, reaching deposits trapped within shale formations was cost-prohibitive. Today, due in large part to fracking, gas production in the United States is much higher. Many proponents of the process argue that it will help the U.S. reduce its reliance upon foreign oil imports.

A well is drilled thousands of feet below the surface to reach the layer of shale rock. It descends vertically until it reaches the shale formation.

More than a million gallons of water, along with sand and various chemicals are sent through the well. Most fracks contain 99% water and sand. This introduces a high level of pressure into the rock layer, which causes fissures to form. The sand keeps the fissures open, allowing natural gas to escape into the well through small perforations made in the steel casing. The gas flows from the well into a special container. The pressurized water is then removed and transported to a treatment center.

Concerns Regarding Potential Water Contamination

Swan Energy knows that primary concern posed by fracking critics is that groundwater – water found below the surface – is contaminated by the gas-extraction procedure. They particularly complaint is about contamination of water wells in highly-populated areas, since the general public is exposed to such wells. Critics allege that the chemicals added to wells escape from the casing, and thus jeopardize the safety of the public’s drinking water.

Arguments That Dispel Groundwater Contamination Fears

There are few, if any, reliable studies that clearly demonstrate the contamination argued by critics of hydraulic fracturing. In fact, EPA Administrator Lisa Jackson testified in front of a House Oversight Committee in May 2011 that she was unaware of any documented cases showing such results. She stated, “I’m not aware of any proven case where the fracking process itself has affected water.”

Additionally, Mr. Brandon Davis points to a report titled “Fact-Based Regulation For Environmental Protection In Shale Gas Development” that shows many of the issues attributed to fracking actually stem from other causes. The report’s authors demonstrated that if contamination occurs, it is due to poor well construction as opposed to the fracking procedure. Such problems can be found in all gas and oil drilling projects, implying that the focus on hydraulic fracturing is misplaced.

The Path Ahead For Hydraulic Fracturing

The industry is in favor of smart regulations that will improve the construction of wells, and thus minimize the likelihood of gas and fluid seepage. To that end, many operators are working with state legislators. The danger is that unwarranted concerns lacking factual support may prompt many states to impulsively pass laws banning fracking, despite its proven benefits. While the road ahead is uncertain, Ms. Jackson’s testimony and recent comments should prove helpful toward forging a reasonable path forward, say Brandon Davis of Swan Energy.


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EPA Backpedals on Fracking Contamination – from Brandon Davis, Swan Energy Colorado

Texas Water-Pollution Suit Dropped; Third Recent Setback on Drilling for Agency

The Environmental Protection Agency has dropped its claim that an energy company contaminated drinking water in Texas, the third time in recent months that the agency has backtracked on high-profile local allegations linking natural-gas drilling and water pollution.

On Friday, the agency told a federal judge it withdrew an administrative order that alleged Range Resources Corp. had polluted water wells in a rural Texas county west of Fort Worth. Under an agreement filed in U.S. court in Dallas, the EPA will also drop the lawsuit it filed in January 2011 against Range, and Range will end its appeal of the…continue reading

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Posted by on April 10, 2012 in Oil and Gas News


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Unexpected Top Oil Field Found in Swan Energy’s Backyard

Unexpected Top Oil Field Found in Swan Energy’s Backyard

After 39 years of developmental history, the Wattenberg oil and gas field was a close miss. Wattenberg was supposed to have already peaked as a gas field and not considered much of an oil field says Swan Energy.  Although it was expected to produce natural gas for just a few years, Wattenberg has been steadily producing gas since 1970. Wattenberg now is the 7th largest gas field in the United States.

That all changed in 2009 when the first Niobrara shale horizontal well (famously known as the Jake) was drilled and produced 50,000 barrels of oil in the first 90 days.   A year later the Jake well is still producing more then 2,500 barrels of oil per month.  In 2010 Swan Energy noted that, using the Jake well as a model, several other companies drilled comparably performing wells in the Niobrara shale using horizontal drilling and fracking techniques.

Two years ago the oil rush began in Colorado.  The Wattenberg is not considered the largest oil field in terms of acreage but it is what we at Swan Energy call “oil dense”.  It is two to four times more “oil dense” than the Bakken field (based on 25 -40 OOIP MMBEO/Section for the Wattenburg).

It is estimated that the Wattenberg field can produce 55 Million Barrels of Oil Equivalent per year in the Niobrara shale formation.

The Wattenberg oil and gas field is 20 miles north of the Swan Energy Inc corporate headquarters in Colorado.

The Niobrara shale formation is about 6,800 – 7,200 feet deep with an average thickness of 400 feet. However, the northwest portion of the Wattenberg field can be as much as 1,400 feet thick.  With recent advances in horizontal drilling and hydraulic fracturing the Niobrara shale found in the Wattenberg field is quickly becoming one of the hot oil plays of the west.

Public companies like Anadarko, Chesapeake, Noble Energy, Devon and ConocoPhillips are grabbing as many mineral and land leases as possible.   These companies are going after the estimated 55 million barrels of oil equivalent per year sitting untapped in the Wattenberg field found in the Niobrara formation.  The Barrels of Oil Equivalent (BOE) per year expectation and the increased ability to extract the oil quickly through horizontal drilling and fracturing has created an oil race that Colorado has never seen before.

High oil prices have created even more urgency.  Horizontal fracturing wells make sense to drill while oil prices are high.  The cost of one well is between 4 to 5 million dollars.  Oil companies are willing to take this risk because they know, based on the results from the development testing wells they drilled in 2010 and 2011, that they will hit oil and will see a 30% increase in both initial production (IP) and one year cumulatives over vertical wells.

Anadarko is projecting a payout in 10 months on a typical horizontal well drilled in the Wattenberg field.  These factors explain why public oil companies are racing to get as many land and mineral leases as possible. They have an aggressive drilling schedule of 10 to 12 wells per month because they are projecting a much larger production in a shorter time span when compared to typical vertical well projects.

Any investor looking to invest in the oil and gas sector should keep an eye on the Wattenberg oil and gas field.   Most of the companies that are drilling here are seeing well averages triple their Expected Ultimate Recovery (EUR) revenue production levels in the last several months.

In 2009, when horizontal drilling and fracturing started in this field, the Wattenberg saw at least a 20% year-on-year growth rate in Barrels of Oil Equivalent (BOE) since the wells have come online.

Brandon Davis of Swan Energy Inc thinks there are several factors that make Wattenberg a very advantageous and conservative oil play:

  • High-quality, liquids-rich reservoir
  • Strong proven well performance
  • High hydrocarbon saturations per acre (2 to 4x over the Bakken)
  • Large continuous reservoirs
  • Horizontal drilling and fracturing ability to tap into reservoirs that are 12 times larger then the vertical wells in the same area.
  • High Barrels of Oil Equivalent per Day (BOED) production numbers
  • Short 10 day drilling schedules.
  • Quick payout points based on EUR range of 300,000 – 600,000 BOE per well.
  • With only a few dozen horizontal wells starting to produce in the 3rd Quarter of 2011, the Wattenberg field still was able to set a new record for quarterly sales volume for horizontal wells of 72,400 BOEPD – that’s a 22% increase over 3rd quarter 2010.

With the modern horizontal drilling and fracturing techniques and short Expected Ultimate Recovery curves, Wattenberg has been proven to be a very conservative oil move for investors and companies that are drilling here.

Considering high oil prices, the pressure cooker that is heating up in Iran and the Middle East, the discovery of this oil field could not have come at a better time for the United States.  In 2012, the Wattenberg oil and gas field will play an important role in decreasing our dependence on foreign oil while increasing domestic jobs.   With the Wattenberg field in Swan Energy’s backyard you can rest assured that we will be looking at this tremendous opportunity.


Posted by on March 12, 2012 in Oil and Gas Production


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Swan Energy Explains Modern Horizontal Drilling Techniques

At Swan Energy we often talk about pools of oil, but in fact oil exists between the grains of porous rock broken up by faults. With the advancement of horizontal drilling combined with hydraulic fracturing the industry is able to be much more effective at extracting the oil from targeted rock formation.

Horizontal drilling starts off with a vertical well bore. When the bore gets near the target formation the drilling string then makes a 90-degree turn so that the well bore runs parallel to the target formation. Because of the flexibility in the drilling pipe at these lengths the drill string can be snaked through the target formation.

To learn more about horizontal drilling and fracturing go to:

In the Wattenberg field the average horizontal well is 7,000 feet deep and then runs 4,000 feet horizontally according to Swan Energy.

These horizontal wells have a significant advantage over vertical wells. In some cases a 4,000 foot horizontal well bore can have as many as 16 perforations  resulting in extracting more oil in a shorter timespan throughout the target formation.

The modern technique of combining fracturing with horizontal drilling has opened up new discoveries throughout the continental United States — Eagleford, Bakken, and the recent discovery of the Wattenberg field. As with the Wattenberg, most of these hot new oil plays that we hear so much about have been known for decades.   It is only now with high oil prices and this new technology of horizontal drilling and hydraulic fracking that makes these fields significant oil plays.

This kind of drilling not only opens up new oil and gas fields, but it also gives the ability to have several wells drilled from one drilling pad site location. For example, Swan Energy estimates that on 1288-acre parcel of land it may be possible to drill 32 vertical wells. One horizontal multi-well pad site with horizontal wells could effectively extract as much oil and gas from the 1288 acre of land as the 32 vertical wells. For Brandon Davis and Swan Energy this significantly reduces cost, and has much less environmental impact on the surface.

To learn more about horizontal drilling and fracturing go to:

To learn more about horizontal drilling and fracturing go to:

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Posted by on March 12, 2012 in Oil and Gas Production


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