• USA
  • Exploration and Production
  • Gathering and Transmission
  • Marketing
• Norway

USA

Areas and licenses

The company leases or owns close to 180,000 acres of land in the US. The leasing contracts entitle the company to conduct its exploration activities. The majority of the leasing contracts last for 5 years, with an option to extend the contract for another 5 years. The duration of the contracts vary, but few leasing contracts last for less than 3 years. The rent is paid annually until drilling and production starts. If the company decides to start drilling and production, the license contract is automatically converted to a production contract, entitling the landowner to a royalty until the reserves are depleted. If production commences, the company can produce gas until the reserves are depleted.

The Appalachian Basin

The company’s production areas are mainly located in the Appalachian Basin in the northeastern US (New York and Pennsylvania). The central New York area is a core focus area where the company uses horizontal drilling to unlock multiple fracture systems, since these have so far been the best performing reservoirs in the area. The company also participates in some non-operated wells both in the Appalachian Basin and in the State of Oklahoma.

The Appalachian Basin has until recently been characterized by shallow reserves (3-5,000 feet) over large areas, with very low risk for drilling dry holes. The area has been a relatively unexplored field for deeper gas reserves. Relatively few wells have penetrated formations below the Medina like reserves at around 5,000 feet. The Appalachian Basin has experienced increased interest from larger players during recent years, especially with focus on deeper reservoirs such as in the Trenton Black River formation. Production wells in the Trenton Black River have yielded more than 3,000 MMcf per year, and presently account for more than 60 percent of all production in the New York state. The Trenton Black River wells are still not all that deep considering that they are typically drilled down to between 7,500 and 10,000 feet.

The company's central New York acerage is the closest gas field to New York City.