• Newfield Exploration Co., Houston, (NYSE: NFX) has entered the Marcellus shale play in Pennsylvania through a joint-exploration agreement on 140,000 gross acres with New York-based Hess Corp. (NYSE: HES) for an undisclosed price.

The acreage covered in the agreement is primarily in Susquehanna and Wayne counties in northeastern Pennsylvania. Newfield will operate the new venture with each company holding a 50% interest in the venture.

• New York State issued its proposed new regulations for obtaining natural gas well permits in the state. These proposed rules, which are open to public comment until November 30, were created largely due to the advent of hydraulic fracturing and horizontal well drilling in the Marcellus shale.

For more than a year, there has been a moratorium on the development of natural gas in the New York section of the Marcellus shale. This moratorium was issued by Gov. David Paterson in order to allow the state to investigate whether new regulations on hydraulic fracing and horizontal drilling were necessary.

The proposed regulations include the particularly contentious matter of requiring companies to disclose what chemicals are used in their fracing fluids. The state would require resulting wastewater from these efforts to be stored onsite in steel tanks or shipped to a storage pit via a double-liner pipeline system. The companies’ disposal plans will also require a tracking process similar to those used to track medical waste.

Additionally, the state would require producers to have state inspectors on site during well construction, raising the question of whether the state has enough inspectors. The inability of the state to field enough inspectors could lead to long hold-ups in the development of this portion of the play.

Further measures that would be part of the state regulations require companies to test private water wells within 1,000 feet of a drilling site prior to drilling and monitor them throughout the drilling process.

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