Southwestern planning to spend $500M



Southwestern Energy expects to spend $500 million inPennsylvaniain 2012, and will up its drilling rigs while other companies are pulling theirs out.

Area manager Dave Sweeley told a packed Wyoming County Chamber of Commerce luncheon that Southwestern was in a lease capture mode.

In other words, leases that are not held by production, must be drilled or they will expire.

So Southwestern is expecting to drill 84 wells and put 60 of them to sales.

Sweeley said that at the end of 2011, Southwestern held approximately 187,000 net acres inPennsylvania.

He said the company which had spent $600 million between 2007 and 2011 would continue development inBradfordandSusquehannaCounties, and begin development inLycomingCounty.

Although it has a 13,000 square foot office just off Rt. 92 inLemon Township,WyomingCounty, he did not anticipate drilling in the county.

However he did expect the office, warehouse and storage yard facilities would be expanded another 5-6,000 square feet as the company’s midstream operations in Wysox would relocate.

But, Sweeley said there was a plus forBradfordCountybecause he believed Southwestern was handling a deed closing this week on the oldCamptownElementary Schooland would use that as additional office space and personnel housing.

Asked about a test well in the Fleetville area ofLackawannaCounty, Sweeley said,  “It’s not clear on what we want to do with that. There’s been discussion about drilling a horizontal well there, but that’s about it.”

He said the depressed gas prices have caused some alarm in the industry but he expects that could change.

And, he is hopeful that the region might see more vehicles converted over to using compressed natural gas to help spur the industry.

He noted that as part of a $2.3 million investment, his own company recently gave away 21 new 2012 CNG-powered vehicles as an employee incentive to get its people talking about the benefits of CNG firsthand.

One of the winners was Kim Galella of Tunkhannock.

Sweeley admits the problem, however, is one of infrastructure with no CNG stations available locallyto power vehicles.

That should change. “How quickly will largely depend on haw hard the government pushes us,” Sweeley said. “We want it to happen.”