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West Virginia

June 4, 2008

West Virginia’s oil and gas fields are surging

CHARLESTON — More than twice as many gas and oil drilling permits are being issued in West Virginia today than 10 years ago, reflecting a renewed interest in natural resource exploration due to surging gas and oil prices.

As of Wednesday, the state Department of Environmental Protection issued 1,332 drilling permits this year. That’s on par with numbers from 2006 and 2007.

In 1999, only 649 permits were issued within that time frame.

Charlie Burd, executive director of the Independent Oil and Gas Association of West Virginia, said sky-high oil and gas prices have contributed to the high drilling activity in the state.

“Drilling activity has held very strong over the last three years,” Burd said. “I don’t believe the industry foresees a downturn in that activity given today’s operating parameters.”

Experts say this trend is a direct result of oil prices, which have lingered around $130 a barrel this week. Two years ago, oil cost about $70 a barrel. Six years ago, the average price for a barrel was $16.

Contractors and drillers see opportunity in West Virginia’s oil and gas fields, a possible solution to the climbing, unstable world market.

The DEP maintains records on more than 40,000 active oil and gas wells. There are about 25,000 inactive wells in the state.

Another draw for West Virginia is the Marcellus Formation, or Marcellus Shale, which runs through western Maryland, southern New York, eastern Ohio and most of Pennsylvania and West Virginia. The formation is a sedimentary bedrock unit that is believed to contain a large source of untapped natural gas reserves.

“The Marcellus Formation seems to be a very hot, active formation that will be drilled in the upcoming months,” Burd said.

The hotspots in West Virginia for drilling appear to be the north-central part of the state and in south. The only area where no drilling takes place is in the Eastern Panhandle, which does not have producing natural gas wells.

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