Bill Haley and His Comets were geologic prophets with their classic rock

and roll hit. It has been known for several decades now that California is

overdue for a major earthquake along its San Andreas Fault System. Two

recent earthquakes with magnitudes estimated at 6.4 and 7.1 have

occurred and increased the nervousness of California residents and state

officials. These latest quakes occurred along two separate faults in the

Mojave Desert in a geologic area known as the Eastern Shear Zone, not a

part of the San Andreas fault which trends along the western side of

California. According to the California Earthquake Authority (CEA),

California has 15,700 known faults with more than 500 of them active.

California seismologists predict that the chance of the “big one,” with a

magnitude of up to 8.3, along the San Andreas or closely associated fault

systems approaches 100 percent over the next 30 years, making this

prediction a near certainty. When the big quake does happen there, it

will be a catastrophic event with huge human and economic costs. We

need to be ready to help California when, not if, that event occurs. In

contrast to California, most of Pennsylvania sits in an areas of relative

tectonic stability. There are daily seismic events and earthquakes to be

sure, but less than a handful with magnitudes greater than 5.0. Now there

is an increased focus by the PADEP on earthquakes induced by either

“deep” oil and gas operations or waste water injection. More about how

PA shakes, rattles, and rolls in this month’s technical article.

In this issue

Shake, Rattle, and Roll P.1 2019 Conventional Permits P.2

In the Spotlight P.3 PA Seismicity p.4

StratResources p.8

About this Newsletter

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Cary Kuminecz CPG, PG is President/

Owner of StratResources Geologic

Consulting, PLLC which provides

prospect generation, geologic

property evaluation, and well log

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the oil & gas industry and

landowners. For more information

and for past issues of this newsletter

please visit:

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The Conventional Operator

Bi-Monthly Newsletter for Operators Exploring & Developing Conventional Oil & Gas Plays in Pennsylvania

ISSUE 27 July 2019

Shake, Rattle, & Roll

2

Conventional Well Permits - Pennsylvania (2018 & 2019)

Conventional well permits to date in 2019 are 13

percent behind the permit total for the same

period (January through June) last year (123 versus

142 cumulative permits). Coincidentally, average

crude oil prices for ARG’s Group 1 tier are also

approximately 13 percent behind last year’s

averages to date ($56.38/BO in 2019 versus

$64.73/BO for the same time period in 2018).

Since January there have been 85 Oil Well permits

30 Combination Oil & Gas Well permits, 5 Storage

Well Permits, 2 Gas Well permits, and 1 Disposal

Well Permit awarded. Permitting activity has

accelerated in Warren and Forest Counties in the

past two months.

116 of the 123 conventional well permits in 2019

are new permits with only seven (5.7% of total)

being permit renewals.

2019 Conventional Permits Falling Behind 2018 Pace

2019 Conventional Permits by County

County No. Permits % of Total

Warren 63 51.2

McKean 38 30.9

Forest 14 11.4

Bedford 5 4.1

Clarion 1 0.8

Clearfield 1 0.8

Fayette 1 0.8

Total 123 100.0

3

Success Stories, News, Announcements

Diversified Gas & Oil, PLC, parent company of

Diversified Oil & Gas, the largest operator of

conventional wells in the Appalachian basin with

60,000 gross wells and 54,000 operated wells,

reported in its June investor presentation that its

anticipated plugging costs for Pennsylvania wells

ranges from $20k per well in Non-Coal areas to $25k

in Coal areas. Diversified plans to plug a minimum

of 20 wells per year by agreement with the PADEP.

Diversified reports that It operates 22,289 wells in

Pennsylvania at this time.

IOGANY will hold its 39th

annual BBQ this week on

July 11th at Peek n’Peak

Resort in Clymer, New York.

Information about this great

event can be found at:

https://www.iogany.org/files/

BBQTicketForm2019.pdf

"Predictions are fraught with danger especially when

they pertain to the future" - Unknown. But I think

this quote could easily have come from Yogi Berra.

Upcoming events

sponsored by the Drake

Well Museum and Park

in Titusville, PA include

the MEET-U Rib BBQ,. This is an all you can eat

affair from 5-8 PM. Pricing is just $12/adult, $6/

child 5-12 years, and free if you’re reading this and

under 5 years of age.

For the kids, the Museum and Park are sponsoring

Thursday Discovery Days on July 11, 18, 25, and

August 1 . Also, on August 24th the 160th

anniversary of the Drake Well will be celebrated

with Drake Day-Let’s Rock! The day will focus on the

origins of crude oil and will include fossil hunting

and rock identification with geologists as well as

other hands-on activities. See the link below for

details of these events.

https://www.drakewell.org/about-us

The Appalachian

Gas Measurement

Short Course

conference will be

held from July 29th through August 1, 2019 at Robert

Morris University, Moon Township, PA. The course

includes lectures, hands-on classes and exhibitors.

Registration information may be found at:

https://www.agmsc.org/

PIOGA will hold a Water and

Waste technical training

workshop in Wexford, PA on

August 21st. The following

day PIOGA will hold their 22nd Annual Divot Diggers

Golf Outing at Tam O’Shanter of Pennsylvania Golf

Course in Hermitage, PA from 8 AM to 5 PM. Details

for both of these events will be forthcoming on

PIOGA’s website: https://pioga.org/events/pioga-

events/

4

Pennsylvania Seismicity

and

Conventional Oil & Gas Operations

Earthquakes are a type of seismic activity that occurs in Pennsylvania. Most earthquakes in Pennsylvania have usually

been small in magnitude and rarely felt. One recent exception was the June 12th earthquake with a magnitude of 3.4,

which occurred 11 miles southwest of Mifflintown in Juniata County at a depth of approximately 17 miles. No injuries

were reported, but this quake was felt

by many over a

broad area of

central

Pennsylvania.

The Pennsylvania

State Seismic

Network

(PASEIS), which

was completed in 2016, is part of over

100 seismic monitoring stations located

across PA and in nearby states. The

station locations are shown in Figure 1.

The locations of earthquake epicenters

from 1724 to 2003 (and the Mifflintown

Quake) that are shown in Figure 2 are

instructive. The red dots show the

surface locations (epicenter) above

each earthquake’s subsurface focus or

hypocenter. From this map it can be

clearly seen that the majority of

Pennsylvania’s earthquakes and most of

the larger ones occur in the

southeastern portion of the state in

counties surrounding Philadelphia. The

cause of earthquakes in California and

other western states is fairly well

known and related to the styles of

faults and the active tectonic

environments which cause those faults to build up pressure and then suddenly rupture producing the quake. However,

the cause of earthquakes in the eastern United States remains somewhat of a mystery as eastern North America is part of

a tectonically stable continental margin. Movement along unmapped, deep-seated faults or slabs of older continental

crust is likely occurring, but how and why remain unanswered questions. (Continued on Page 5)

Mifflintown Earthquake

Fig. 1

Fig. 2

5

(Continued from Page 4) This brings us to the question of what seismicity (sound-wave induced vibrations in the earth)

has to do with oil and gas operations. In the oil and natural gas patch of western Pennsylvania there is only a very small

chance of natural earthquakes compromising drilling operations, gathering system infrastructure, and public safety. These

earthquakes can be either natural or induced tectonic seismic events resulting from fault or crustal slab movements.

There are also non-tectonic seismic events (i.e., not caused by fault movements in the earth’s crust) originating from mine

and quarry blasting. The vast majority of seismic events recorded in Pennsylvania are of this latter variety, which are easily

distinguishable from tectonic earthquakes in seismograph recordings. A map of total seismic events including natural

earthquakes in a 28-month period is shown in Figure 3 (Homman & Nyblade, n.d.). The comparison of earthquake

locations to location of all seismic events clearly shows the rarity of tectonic earthquakes in Pennsylvania.

Oil and gas operators need to focus on the potential for fault movements created by oil and gas related operations. In

recent years water injection into deep formations with active faults has been documented or at least strongly implicated

in several states, notably Kansas, Oklahoma and Ohio as well in several other countries. The USGS reports that between

1973-2008 an average of 25 earthquakes of magnitude three or larger occurred in the central and eastern US, but this

number, which began increasing in 2009, jumped to over 600 in 2014 and over 1000 in 2015. This number declined in

2017 (to 364), but that is still almost 15 times higher than the previous natural rate (USGS, n.d.). The most common oil and

gas related activity associated with the jump in seismic events has been wastewater injection, and to a lesser extent

hydraulic fracturing. In both cases fluids are injected or introduced into formations that may cause brittle rock failure,

and/or a change in pressure gradients near active faults (McDonnell et al, 2017) leading to sudden fault movement.

Following a 2016 tectonic “micro”-seismic event in Lawrence County, believed to be induced as it correlated with operator

activities (PADEP, 2017), the PADEP has issued guidelines for future wastewater disposal wells and hydraulic fracturing

operations. The change in hydraulic fracturing operations would only apply to drilled wells that have specific geologic

characteristics, particularly if the distance from the frac’d zone to the crystalline Precambrian basement is relatively short.

The change in permit requirements for wastewater injection wells applies to all such wells.

Where the separation between a deep well in the Utica Shale and the crystalline Precambrian basement rock, which is

brittle and likely highly faulted and fractured, is less than a certain thickness, then certain hydraulic fracturing operations,

such as simultaneous zipper fracing, may be proscribed. (Continued on Page 6)

Pennsylvania Seismicity

and

Conventional Oil & Gas Operations

Fig. 3

6

(Continued from Page 5) Skoumal et al (2018) document close agreement between vertical proximity to basement rock

and hydraulic fracturing zones and suggest that injection by fracturing or wastewater disposal within 1 km (3,280 ft) of the

basement may increase the likelihood of induced tectonic seismic activity. Distance to basement is not the only factor

involved as the lithology of the rocks above the basement, the spatial orientation of the fault planes, and the existing

stress states in the rock are all variables that can affect the onset of induced seismicity. Since we often have limited data

to map these characteristics of the crystalline basement rock, the 1 km vertical setback recommendation is an easily

measured and planned for

operational parameter.

Conventional operators in

Pennsylvania do not generally

drill within 1 km of the basement

(see Figure 4, which shows the

area NW of the black line to be

potentially problematic for

certain types of Utica Shale

hydraulic fracturing). But

conventional operators are more

and more seeking to permit and

drill wastewater disposal wells in

conventional formations (e.g.,

Medina Sandstone, Oriskany

Sandstone, and Upper Devonian

Sandstone). In Pennsylvania and

New York these are EPA Class II-D wells and while EPA has primacy in these states, an operator seeking a wastewater

disposal well permit must also obtain a state permit. In Pennsylvania, out of an abundance of caution, the PADEP has

decided that the operator of any new wastewater injection well must agree to, among other requirements, a seismic

monitoring plan regardless of the depth of the injection zone. These plans include creating a seismic activity monitoring

and mitigation plan that includes the setting up of one or multiple seismometers around the well in contact with bedrock.

The data from the seismometers, in turn, must be linked to the regional seismic network. Any seismic event with a Richter

magnitude of 1-2 recorded within six miles of the disposal well, that is interpreted by the seismic network as an induced

tectonic seismic event, may have its injection rate cut until further monitoring suggests a safe injection level if any.

Termination of all activities may be required if an induced tectonic seismic event with a magnitude of 2 or greater occurs

within three miles of the disposal well. Setting up and maintaining for years the seismic monitoring around the disposal

well is quite expensive and contractors specializing in this work need to be hired. It may turn out that the cost savings in

conventional wastewater injection wells versus paying to transport and treat wastewater at a designated facility exceeds

the setup and ongoing costs of seismic monitoring. If that is the case, shallow conventional play disposal wells may still

make economic sense, but the conventional operator needs to go in with eyes wide open. (Continued on Page 7)

Pennsylvania Seismicity

and

Conventional Oil & Gas Operations

Fig. 4

7

(Continued from Page 6)

References Cited:

Homman, K. & Nyblade, A. n.d. Seismicity in Pennsylvania and the Pennsylvania State Seismic Network. Department of

GeoSciences, Penn State University. 1p.

McDonnell, P., Pelepko, S., & Wise, H. 2017. Review of April 2016 Lawrence County seismic events. PADEP Office of Oil and

Gas Management webinar presentation. 24p.

PADEP. 2017. Review of seismic events in Lawrence County Pennsylvania: January 2017. 8100-RE-DEP4711 1/2017.

Skoumal, R.J., Brudzinski, M.R., & Currie, B.S. 2018. Proximity of Precambrian basement affects the likelihood of induced

seismicity in the Appalachian, Illinois, and Williston Basins, central and eastern United States. Geosphere, Vol. 14.

No. 3. 15p. doi:10.1130/GES01542.1

USGS, n.d., retrieved from https://earthquake.usgs.gov/research/induced/studies.php

Pennsylvania Seismicity

and

Conventional Oil & Gas Operations

8

Providing Geologic Consulting Services to the

Oil & Gas Industry and Landowners

Oil & Gas Prospect Generation

Evaluation of Properties for Water Injection or Disposal

Acreage Hydrocarbon Assessments/Property Risk Management Assessment

Quantitative Well Log Analysis

Core Descriptions

Analysis of Drillers’ Cuttings

Well Log Quality Control at the Wellsite

Volumetric Reserve Estimates

Oil & Gas Data Compilations and Reporting

Subsurface Geologic Reports/Interpretation of 3rd Party Reports

Conversion of Paper Well Logs into Raster Format (TIF) or Vector Format (LAS) Files

Training Classes

-Stratigraphy of the Northern Appalachian Basin

-Upper Devonian Sequence Stratigraphy Using Well Logs