Gas driller Chesapeake Energy's production report rife with errors, DEP claims

| Thursday, Aug. 23, 2012, 12:01 a.m.

The Pennsylvania Department of Environmental Protection says natural gas drilling company Chesapeake Energy last week filed an important Marcellus shale production report containing so many errors that a state database rejected it.

DEP spokesman Kevin Sunday said on Tuesday that a previous statement by Oklahoma City-based Chesapeake Energy Corp. that suggested state databases were the problem was not entirely accurate and omitted important points.

“DEP's production database functioned exactly as designed by rejecting reports that contain obvious data entry errors,” Sunday said.

For example, Chesapeake attempted to report production information on wells where the drilling start date was not listed; attempted to report more producing days than the number of days in the reporting period; and attempted to report drilled wells as wells that were not drilled, Sunday said.

Chesapeake also waited until the end of a 45-day grace period to submit data, he said.

Pennsylvania released official biannual data on natural gas production last week but did not reveal that Chesapeake Energy's numbers were missing.

Because the firm has been a top producer in previous reports, statewide totals were not close to being accurate.

Chesapeake spokesman Rory Sweeny said on Tuesday that “Chesapeake is working cooperatively with the department to ensure future issues with submissions are avoided.”

The company has been under scrutiny by shareholders and federal securities officials. Its stock dropped sharply in the spring but has rebounded somewhat.

Pennsylvania officials cannot control the quality of data they receive, but one expert said they should have let the public know that an important database was incomplete, even if they probably did not have a legal obligation to do so.

“I think they botched their professional obligations,” said Michael Dworkin, director of the Institute for Energy and the Environment at Vermont Law School and a former chairman of that state's public service board.

Dworkin said it appears the DEP knew the reports were missing data from the state's largest natural gas producer, but did not bother to include a note to that effect.

He said if the agency left it out in front of the public, looking complete when it was not, then that was a problem.

Sweeny declined to provide copies of Chesapeake's emails to the state regarding its data submission.

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