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For Release: Friday, August 29, 2008

Natural Gas Production Dips Slightly in 2007

Natural gas production from New York wells continued at high levels in 2007, although numbers fell just below 2006's record breaking production figures, State Department of Environmental Conservation (DEC) Commissioner Pete Grannis announced today.

For 2007, 54.9 billion cubic feet (bcf) of natural gas was produced in the state. That total fell shy of the all-time high, 55.2 bcf, set a year earlier. Still, the 2007 production total represents a slightly more than 50 percent increase since 2003 (36.0 bcf) and 200 percent increase since 1996 (18.3 bcf). The 2007 production, which was enough to supply the heating needs of nearly 800,000 homes for a year, was driven by prolific wells in the Trenton-Black River formation in the Finger Lakes region.

Oil production in 2007 increased 20 percent from the previous year, with a total of 386,887 barrels reported by purchasers, a rise corresponding with the growing oil prices.

Statewide, 12,994 oil and gas wells were in production in 2007. In addition to oil and gas wells, there were 946 underground natural gas storage wells, 147 brine production wells, 83 geothermal wells and 21 stratigraphic wells (used to gather sub-surface core samples).

"Natural gas production from wells in New York State is a valuable and important resource for the state, providing additional supplies of a cleaner burning fuel and helping to meet our energy needs," Commissioner Grannis said. "DEC has a great deal of authority to oversee drilling and we will exercise it to ensure that the environment is safeguarded, operations are conducted efficiently and landowners' rights are protected."

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 non-renewable natural resources. In addition, DEC protects the ownership rights of landowners affected by energy production.

For more than a decade, the Trenton-Black River formation has been the state's dominant gas production zone, accounting for 75 percent of total production. In 2007, the Trenton-Black River formation produced 41.3 bcf from only 92 active wells. One well in the formation, the Stoscheck, in Van Etten, Chemung County, produced 3.97 bcf -- enough to heat more than 57,000 homes for a year.

Total market value of 2007 oil and gas production in New York is estimated at $516 million. Landowners received an estimated $60.75 million in production royalties. Local government taxes on the market value of production were an estimated $15 million. Also, in 2007, the average price of natural gas in New York was $8.85 per thousand cubic feet and the average wellhead price of oil was $78.59 per barrel.

DEC issued 577 well drilling permits in 2007, down from 622 in 2006 but up from 436 in 2005.

In 2007, 386 permits were issued for natural gas wells, 142 for oil wells, 31 for geothermal wells, 14 for brine production wells, 2 for stratigraphic wells and 2 for underground gas storage wells. Total drilled depth of the wells drilled in 2007 in New York was over 1.4 million feet (about 274 miles, or nearly the same as the drive from Albany to Buffalo).

Additional information on New York's oil and gas resources is available at DEC website. A new online searchable database at New York's Oil & Gas Database provides information on individual well production, drilling operations, locations and depths, along with information on well ownership, well owners and operators, registered drillers, pluggers and companies that provide financial security instruments.

Natural Gas Production Trends (Statewide)

2007: 54.916 billion cubic feet
2006: 55.157 bcf
2005: 55.156 bcf
2004: 46.9 bcf
2003: 36.0 bcf
1996: 18.3 bcf

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