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For Release: Friday, July 14, 2006

DEC Announces Record State Natural Gas Production in 2005

New York State Department of Environmental Conservation (DEC) Commissioner Denise Sheehan today announced that natural gas production from wells in New York State in 2005 was the highest in the State's history. Natural gas production in New York dates back to 1821.

Total reported gas production was 55.2 billion cubic feet (bcf) - an increase of 18 percent from the 46.9 bcf reported in 2004. The 2005 production, which was enough to supply the natural gas needs of nearly 800,000 homes for a year, was the result of prolific wells in the Trenton-Black River formation. Oil production reported by purchasers in New York increased from the previous year to total of 211,292 barrels, likely in response to high oil prices. Well owners also reported a total of 11,700 oil and gas wells. In addition to oil and gas wells, there are 932 underground natural gas storage wells, 136 brine production wells and 33 geothermal wells.

"The safe production of natural gas from wells in New York State provides additional supplies of a cleaner burning fuel, helping to meet our energy needs while also benefitting the upstate economy," Commissioner Sheehan said. "Private investments in new production, especially in the Trenton-Black River formation, are expected to increase in coming years. DEC will continue to regulate energy production to ensure the State's environmental resources are protected and will work with private landowners and local communities to make them aware of their rights with respect to oil and gas leasing and development."

According to figures reported by operators, the Trenton-Black River formation is the State's dominant gas production zone, accounting for almost 80 percent of total production. In 2005, the Trenton-Black River formation produced 44 bcf from only 73 active wells, some of which produced only part of the year. One well in the formation, the Soderblom 1 in the town of Big Flats, Chemung County, produced 6.3 bcf, enough to heat more than 90,000 homes for a year.

Since 1996, independent oil and gas companies have invested an estimated $700 million in Trenton-Black River development, with an average well cost of more than $2.5 million. Most of this exploration has been south and west of the Finger Lakes, with exploratory wells permitted as far east as Montgomery County and as far west as Cattaraugus County. Overall, the Trenton-Black River production extends west to Michigan and Ontario, Canada, and south to West Virginia.

Total market value of 2005 oil and gas production in New York is estimated at $440 million. Landowners received an estimated $53 million in production royalties. Local government taxes on the market value of production were an estimated $13 million. Also, in 2005, the average price of natural gas in New York was $7.78 per thousand cubic feet and the average wellhead price of oil was $52.75.

DEC issued 435 well drilling permits in 2005. Permits issued included 200 for oil wells, 180 for natural gas wells, 15 for geothermal wells, 12 for brine production wells, 7 for stratigraphic wells, 6 for underground gas storage wells and 13 for brine monitoring wells. Total drilled depth of the wells drilled in 2005 in New York was over 887,000 feet (about 170 miles, or more than the distance from Albany to New York City).

DEC has established strict environmental and safety requirements for natural gas and oil development in New York and also is responsible for preventing waste of these natural resources. In addition, DEC protects the ownership rights of landowners affected by energy production.

Additional information on New York's oil and gas resources is available at DEC's website. Information on individual gas well production is available on the site.

A list of the 2005 Natural Gas Production by County is attached.

2005 Natural Gas Production by County In Thousands of Cubic Feet

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