Thursday, May 17, 2012

Carroll County Shale Activity Slows as Chesapeake's Knees Buckle

From The Plain Dealer:
CARROLLTON, Ohio -- At the county courthouse on the village square in Carrollton, workers are accustomed to the visitors from out of town, the folks eager for a stake in a promising shale gas industry.
For months, the people who equip drill sites, lease land and truck pipe and sand have besieged county offices with requests for records and guidance as they set up local operations.
Suddenly, the courthouse halls are noticeably quieter. Glenn Enslen, Carroll County's director of economic development, thinks he knows why. Prospectors are waiting to see whether Chesapeake Energy, lord of the local gas fields, survives a financial crisis now playing out daily in the nation's financial press.
"People are saying, 'Let's sit back and see what happens here,' " Enslen said. "It's still busy. But now we've got a little bit of a wait and see."
If Carroll County's energy boom cools, so will Ohio's.
The rural county 90 miles south of Cleveland is the sweet spot of the emerging industry. About one-third of the 221 horizontal well permits issued by Ohio for drilling in the mile-deep shale bear a Carroll County address. More than 30 gas wells pierce its rolling hills and farms, the densest concentration in the state.
With four $6 million drilling rigs at work around the clock, the county's 30,000 residents are witnessing the new energy age sooner than most. But most of those rigs and wells, like most of the drilling permits, belong to Oklahoma-based Chesapeake, an ambitious company with a big problem.
On Tuesday, Standard & Poor's lowered the company's credit rating deeper below investment grade as it questioned whether it can dig its way out of debt. Chesapeake's stock has lost about half of its value over the last year, the chief executive officer is under fire for conflicts of interest, and the company has said it could run out of money next year.
Read the rest of the article here.

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