UPDATE 3-Chesapeake well leaks in Wyoming, residents evacuate

Wed Apr 25, 2012 7:52pm EDT

Related Topics

* Well leaks natural gas, drilling mud -Chesapeake

* Sixty-seven residents asked to evacuate

* No injuries or explosions reported

By Selam Gebrekidan and Joshua Schneyer

NEW YORK, April 25 (Reuters) - Dozens of residents were evacuated from their homes after a Chesapeake Energy-operated well leaked natural gas and drilling mud in Wyoming, the company said on Wed nesday.

Chesapeake lost control of a shale well late on Tuesday while installing a casing, triggering the leak, the company said in a statement. It wasn't clear how much gas or fluid escaped the well.

A "cloud" of gas could be seen a mile away from the blown-out well, said Russ Dalgarn, coordinator for the Converse County Emergency Management agency in Wyoming.

No injuries, explosion or fires have been reported, and air quality readings near the well were "normal" on Wednesday, with the leaked gas "dissipating into the atmosphere," Chesapeake coordinator Kelsey Campbell said in a statement.

The company has plans to "bring the well under control" as soon as safety conditions permit.

The cause of the incident was under investigation.

Sixty-seven residents within a 2.5 mile radius of the stricken well were asked to evacuate, Chesapeake said. The evacuation was voluntary, and several residents chose to remain in their homes.

"A blowout in a well builds uncertainty and distrust. We need more careful monitoring and regulation of drilling activities in the state," said Bruce Pendery, program director at Wyoming Outdoor Council, an environmental group that has pressed for heightened scrutiny of drilling in the state.

The boom in on-shore production in shale oil and gas -- often near homes and populated areas -- has heightened concern about these accidents. The Rockies and Northern Plains region has stepped up drilling of promising oil and gas reserves in the Niobrara Shale, which straddles Colorado and Wyoming.

The regional office of the U.S. Environmental Protection Agency (EPA) is sending an inspector to the site of the accident. EPA received reports of an oil sheen on an irrigation channel and a pond near the well, said agency spokesman Martin McComb. Neither is a source of drinking water for nearby communities, he said.

Chesapeake may have encountered a pocket of high-pressure natural gas while drilling the well, McComb said.

Chesapeake said the oil-laden drilling mud that leaked from the well is mostly being contained on site.

Oklahoma City-based Chesapeake is the No. 2 U.S. natural gas driller. Last year, it signed a joint-venture agreement with Chinese national oil firm CNOOC for a third of its Niobrara interests.

Around a year ago, Chesapeake had a blowout on a well in the natural gas-rich Marcellus shale of Pennsylvania. It took six days to bring under control and prompted a fierce backlash among area residents opposed to the drilling method known as hydraulic fracturing, in which water, sand and chemicals are pumped deep underground to fracture hydrocarbons-bearing shale rock.

In Wyoming, Governor Matt Mead said the state will investigate this week's incident, to get a "better sense of what can or should be done in the future."

Chesapeake shares rose 2 percent to $18.13 on the New York Stock Exchange on Wednesday.

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