Natural gas is produced from formations that lie thousands of feet below the surface of the earth.

Natural gas companies begin the process by researching mineral rights ownership records at county courthouses in areas where they plan to drill. Standard leases establish a partnership between the mineral owner and the company. Typically, the owner of the mineral rights is paid a sum, called a bonus, when a lease is signed. If production does occur, the owner will receive monthly payments based on a percentage of the well’s production and on the net proceeds the operating company receives. This is called the royalty payment.

After a lease agreement is signed, the operator evaluates its geological information and selects a drilling location. Many factors go into selecting a drilling site, including:

• Geography and topography
• Location of access roads, pipelines and utilities
• Available water sources
• Proximity to wetlands, sensitive wildlife habitat or significant archaeological sites

Construction and preparation of a padsite is the next step and typically lasts four to six weeks. Once the drilling rig and other necessary equipment are in place, the drilling process begins. Horizontal wells in shale formations are started by first drilling a vertical hole, and then drilling horizontally into the potential productive zone to recover maximum reserves.

After a well reaches total depth, the drilling rig is removed and a smaller completion rig is moved in to prepare the wellbore for the completion phase. The well is then stimulated using a proven, high-tech process known as hydraulic fracturing, which has been used by the industry since the 1940s. Learn more at hydraulicfracturing.com.

Once a well has been drilled and completed, a wellhead or “Christmas tree” is placed on top of the newly completed well to control and regulate the flow of natural gas and water. From the wellhead, the produced fluids are directed to separation vessels where the fluid stream is divided into oil, gas and saltwater. Once separated, the gas is metered and delivered into a regional gas sales pipeline.