Wyoming neighbors of Chesapeake well leak evacuate

NEW YORK Wed Apr 25, 2012 10:36pm BST

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NEW YORK (Reuters) - More than 60 residents were evacuated from their homes near a Chesapeake Energy-operated well that leaked natural gas and drilling mud in Wyoming, the company said on Wednesday.

Chesapeake lost control of the well late on Tuesday while installing a casing, which triggered the leak, the company said in a statement. It wasn't clear how much gas or fluid escaped the well. Local TV reports said the sound of natural gas rushing from the ground could be heard miles away.

No injuries, explosion or fires have been reported, and Chesapeake said air quality readings near the well were "normal" on Wednesday. The company 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.

"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 regulation 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.

Chesapeake said it has disclosed the incident to "all appropriate regulatory agencies."

The regional office of the U.S. Environmental Protection Agency (EPA) said it is sending an inspector to the site of the accident. An EPA official, Martin McComb, said the agency received reports of an oil sheen on an irrigation channel and a pond near the well. McComb said the bodies of water are not used for drinking water by nearby communities.

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

Chesapeake said it has several workers on site working on containment efforts.

Oklahoma City-based Chesapeake is the No. 2 U.S. natural gas driller. The latest incident occurred in the promising oil and gas prospect called Niobrara, which stretches across Wyoming and Colorado.

Last year, Chesapeake 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 triggered 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.

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

The National Response Center, a federal agency that monitors environmental pollution, has not yet issued a report about the incident. The state Oil and Gas Conservation Commission, which also monitors drilling operations, was not immediately reachable for comment.

(Editing by Marguerita Choy; Editing by David Gregorio)

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