Thursday, July 1, 2010

East Resources Inc Questions Basis for PA Department of Agriculture Cattle Quarantine

East Resources, Inc. today released the following statement regarding the order issued by the Department of Agriculture to quarantine cattle on the Tioga County farm owned by Don and Carol Johnson in Shippen Township, Tioga County. East performed a hydraulic fracturing operation on a horizontal Marcellus shale gas well drilled on the farm that the Johnsons leased to East.

On May 2, the Department of Environmental Protection notified East Resources about a possible leak from a temporary water impoundment located at the Johnson 435-1H Well Site. The impoundment contained a mixture of fresh water and flowback water from a hydraulic fracturing operation on the well. Flowback water was first introduced into the impoundment on April 9.

East immediately initiated an investigation and remedial activities that were conducted in coordination with the Department. We immediately fenced off the pasture area impacted by the leak, and the impoundment was dewatered on May 3. By May 5, the wet soil in the impacted area had been removed from the site.

By May 7, the impoundment was closed in its entirety. Water from the former impoundment as well as water collected in the release area was removed, effectively eliminating the potential of future impacts. The liner, all wet soil below the liner, and the soils taken from below the impoundment were removed and staged in secondary containment prior to disposal at an authorized and permitted landfill.

In coordination with the Department, East collected and analyzed water and soil samples from the impoundment, the area in the nearby pasture affected by the leak, and numerous other areas in the vicinity of the impoundment. The water and soil samples were evaluated for background conditions and to assess possible impacts using methods with quantitation limits consistent with Act 2 Statewide Health Standards. None of the soil samples contained concentrations of compounds of concern in excess of established PADEP Act 2 residential Statewide Health Standards.

The site was reclaimed, and samples were subsequently collected and evaluated to confirm that the source of the leak was removed and the impacted area was remediated. East had successfully completed the remediation of the site by eliminating the leak, removing the source, and removing the areas of concern. No further remediation was necessary.

With regard to the imposition of a quarantine on the Johnson's cattle by the Pennsylvania Department of Agriculture, everything that East has seen from the results of soil and water sampling conducted at the request of the Department indicates no reason for any concern of adverse impacts to the Johnson's cattle or to public health.

East received a letter from the Department of Agriculture explaining its justification for the quarantine on June 24, 2010. East questions the basis for the quarantine, and we have contracted with an independent toxicologist to evaluate the Department's rationale for imposing the quarantine. East is also concerned that the quarantine imposes an unnecessary burden on the Johnson's farm operations.

East expects to receive the toxicologist's report shortly.

East Resources, Inc. is an independent oil and gas producer in the Appalachian and Rocky Mountain regions of the United States. East is one of the most active oil and gas explorers in the Appalachian region and is making significant investments in the responsible development of natural gas from the Marcellus Shale. The company holds approximately 900,000 gross acres of Marcellus Shale rights in Pennsylvania, West Virginia and New York, and it employs more than 355 office and field personnel with approximately 60 employees in Tioga County.

East Resources, Inc.

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