CONSOL and Hess to jointly develop Utica shale in Ohio
Thursday, October 27, 2011
PITTSBURGH — CONSOL Energy Inc. announced Oct. 24 it has closed on its previously announced agreement with Hess Corporation to jointly explore and develop CONSOL’s nearly 200,000 Utica Shale acres in Ohio.
In the transaction, Hess Corporation acquired a 50 percent interest in nearly 200,000 Ohio Utica Shale acres owned by CONSOL in consideration for $594 million, of which $60 million was paid at closing.
CONSOL and Hess Corporation have entered into a joint development agreement in which Hess Corporation will pay approximately $534 million in the form of a one-half drilling carry of certain CONSOL working interest obligations as the acreage is developed.
The effective date of the transaction is Aug. 1, 2011.
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Shale FAQ
What is fracking?
Fracking is a slang term for hydraulic fracturing. Fracturing is a process by which highly pressurized fluid is pumped thousands of feet into the ground to fracture rock formations. The goal is to release the natural gas that’s locked inside the rock.
Is it safe?
What most concerns people about fracturing is ground water contamination. The worry is that fractures underground, caused by the process, will extending upwards and into aquifers, releasing gas and chemicals into the ground water supply. There’s been no confirmed reports of such a thing happening. Though surface spills and drill site blowouts can lead to localized environmental concerns.
Will my water catch on fire?
Flammable water is caused by the release of methane gas into a drinking water supply. Methane gas occurs naturally and can be released by any kind of drilling, including water wells. In Pennsylvania officials fined Chesapeake Energy $1 million for contaminating ground water with methane. It was determined that the company had not properly cemented it’s boreholes and gas migrated up the well, between rock and into aquifers.