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Jan. 5th 2012 10pm
Nomac Drilling Rig #17 drilled into a shallow gas pocket soon after spudding in at a drilling depth of 900' northwest of Sweetwater, Oklahoma this evening around 6pm and burned to the ground. No injuries were reported.
Workers stated that they encountered the abnormally pressurized zone at relief time around 6pm when the relief crew was in the change house.
It was first thought that they had encountered a shallow air pocket but after testing with a "sniffer" (a device to determine the presence of hydrocarbons) the well soon caught fire.
Witnesses 3/4 of a mile to the north reported hearing a loud "boom" from their residence "and then it sounded like a jet engine was right outside our home".
Chesapeake Energy Nomac Rig 17 Blowout Sweetwater Oklahoma
Seeded on Sat Jan 7, 2012 1:55 PM EST
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Workers stated that they encountered the abnormally pressurized zone at relief time around 6pm when the relief crew was in the change house.
It's very unusual to hit a shallow air pocket in the area and even rarer to encounter any hydrocarbons at this shallow depth above the planned surface casing.
El Reno, Oklahoma based Nomac Drilling is a wholly owned subsidiary of Chesapeake Energy, one of the nations most active drillers.
Several things come to mind:
If the shallow gas pocket was present when the prospect was mapped and the geohazards assessment made (presumably 1 to 2 years ago or more) then the geohazards survey (assuming one was carried out) was in error and guilty of negligence (for not point out the presence of shallow gas).
If such massive shallow gas pocket was not detected and not normally found at such shallow depth, it could only mean massive leakage from the deeper gas reservoirs and the shallow accumulation another consequence of the Intraplate Tectonic activities following the BP Macondo Blowout and the massive oil/gas leak and subsequent deep underground erosion from the continuing widespread brine-gas leakage from the deep reservoirs in the region and not only from the Macondo Reservoir.
This will tie in with events of mass bird dropping to their death, mass fish kills and swarms of shallow earthquakes in the New Madrid Fault zone following the Macondo Disaster.
- 8 votes
#1 - Sat Jan 7, 2012 2:12 PM ESTBk, looks like the long term consequences are playing out according to your theory.
- 8 votes
#2 - Sat Jan 7, 2012 2:19 PM ESTJay,
If a major volcanic eruption like Pinatubo or Krakatau (of a couple weeks) can change the world's climate, I do not see how millions of tons of methane from the evaporation of hydrate deposits and from the escape of deep-seated gas from not only the Macondo Reservoir but all the regions affected by the release of the pent-up tectonic stress in the New Madrid Fault zone, for more than 20 months can have no effect on the world's climate.
So far BP had lied only about the amount of Oil spilled. We have not even considered the consequence of the gas released. I suspect even the scientists are too scared to contemplate on the gaseous discharge.
- 5 votes
#3 - Sat Jan 7, 2012 3:27 PM ESTNatural gas finally got some good news last week. First, major producer, Chesapeake Energy (CHK) announced that it was cutting its natural gas production by 50%, taking some immediate pressure off the market. Sure, (CHK) is just one company, but others may follow suit.
Second, at the urging of my friend, Boone Pickens, Present Obama announced funding of some natural gas corridors in his State of the Union address. These are chains of natural gas stations placed every 100 miles stretching from east to west and north to south that would allow heavy trucks on transcontinental routes to refuel. This would provide the extra incentive for these 18 wheelers to convert from diesel fuel to CH4 at a nominal cost and put a major dent in our oil imports.
The news was enough to trigger a massive short covering rally in this most unloved of molecules. The spot market soared 25%, from $2.25 to $2.82 per MBTU’s, while the ETF (UNG) leapt from $5 to $6.
I am going to call the bluff of the market here and buy the United States Natural Gas Fund April, 2012 $6 puts at $0.65 or best. That way I can take advantage of the huge contango that exists between the spot and forward markets for natural gas futures contracts. To avoid actually drilling its own wells, the (UNG) buys forward contracts at huge premiums and holds them until they expire at spot. They then roll the cash forward into new contracts and repeat the process. It is one of the best wealth destruction machines I have ever seen and explains why (UNG) has, by far, outperformed natural gas on the downside. It is a great thing to be short.
The Mad Hedge Fund Trader
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