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ENERGY TECH
Waste from oil and gas operations tied to Oklahoma earthquakes
by Daniel J. Graeber
Washington (UPI) May 6, 2013


Sabine, Forest merge to take on Texas shale
Houston (UPI) May 6, 2013 - Two companies, Sabine Oil & Gas and Forest Oil Corp., said Tuesday they signed a merger agreement to become one of the largest entities working in East Texas.

Sabine and Forest announced an all-stock transaction that would combine their assets in East Texas, including the Eagle Ford shale basin.

Sabine shareholders will hold a 73.5 percent stake in the parent company Sabine Oil & Gas Corp., which will have headquarters in Houston.

In April, the U.S. Energy Information Administration said it expected a net increase of 71,000 barrels of oil per day from shale basins in the country. The Eagle Ford shale area in Texas is expected to lead in terms of oil production with a 2.3 percent increase from April to May.

Combined, Sabine and Forest produce an estimated 345 million cubic feet equivalent, of which 65 percent is natural gas.

The new business entity will be lead by Sabine's current management team. Forest Oil will remain in existence as a Sabine subsidiary.

The U.S. and Oklahoma Geological Surveys said an increase in earthquakes in the state may be attributed to heightened oil and gas activity.

USGS said it examined the rate of increase in earthquakes in Oklahoma and found they weren't due to random fluctuations in seismic activity in that state.

The joint study found injecting wastewater underground can lead to pressure increases that may contribute to earthquakes.

"Much of this wastewater is a byproduct of oil and gas production and is routinely disposed of by injection into wells specifically designed and approved for this purpose," USGS said.

The waste may be tied to hydraulic fracturing, a controversial drilling practice dubbed fracking. The process is used to extract oil and gas from shale deposits and has lead to an accelerated production rate from North American reserves. Critics of the practice say it's too great of an environmental threat to embrace.

USGS and OGS said Monday the rate of earthquakes in the state have increased by about 50 percent since October 2013. Activity in general has increased since 2009 and a magnitude 5.6 earthquake recorded in 2011 was the largest ever recorded in Oklahoma.

Oklahoma is the No. 5 oil producer and the No. 4 natural gas producer in the United States.

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