CHARLESTON, W.Va. — Southwestern Energy Corporation will be moving forward quickly with work at Chesapeake Energy sites throughout West Virginia following Gov. Earl Ray Tomblin’s Wednesday signing of new legislation allowing natural gas well work permits to be transferred between companies.
“We’ll start off with one drilling rig and follow it immediately with a second. So, right now, on the way to West Virginia, given this bill has been signed, we have two rigs that will come in,” Bill Way, president and chief operating officer of Southwestern, said on Wednesday’s MetroNews “Talkline.”
The new law, which leaders in the state Senate and state House of Delegates fast-tracked, allows transfers of well site permits with approval from the Secretary of the state Department of Environmental Protection. Fees are tied to those transfers.
Last year, Southwestern Energy paid Chesapeake Energy more than $5 billion for 413,000 acres in West Virginia and southwestern Pennsylvania which included 256 operational natural gas drilling wells in the Marcellus and Utica shales.
Without the law, all of those sites would have to go through the full permitting process with the DEP again. The new law lets the work start as soon as the DEP approves the permit transfers which have previously been allowed for coal mining and landfill operations.
“We’ll probably drill somewhere between 50 and 70 wells in the year for a total capital investment, with all other things happening, of at least $500 million this year alone,” Way said of plans that call for drilling activity to eventually be ramped up to between 100 and 200 well sites annually.
Currently Southwestern employs 80 West Virginians. According to Way, that number could grow to 400.
“What this bill does for us and for the state of West Virginia is enable us to get started and get to work and start drilling right away, rather than waiting the 120 days that it takes to do exactly the same work over again in the permitting process,” Way said.
“We’ve got an investment portfolio planned for this state alone upwards of $24 billion of investments over the next 20 years.”
On Wednesday morning, Gov. Tomblin signed the bill into law during a ceremony that included lawmakers.
“This bill streamlines the transfer process of well work permits, not only supporting ongoing business operations and major investments, but to secure opportunities for hardworking West Virginians to find good paying jobs in this growing industry,” Tomblin said in a statement.
Southwestern Energy is based in Houston, Texas.