For Immediate Release

July 15, 2010

(WEST TRENTON, N.J.) --The Delaware River Basin Commission (DRBC) at its July 14, 2010 public business meeting approved Stone Energy Corporation’s proposed water withdrawal from the West Branch Lackawaxen River in Mount Pleasant Township, Wayne County, Pa. Water withdrawn from this site is designed to support Stone Energy’s planned natural gas development and extraction activities targeting shale formations within the drainage area of the basin’s Special Protection Waters in Pennsylvania. Because this water withdrawal is designed to support Stone Energy’s natural gas activities, the docket stipulates that Stone Energy cannot withdraw any water at the site until it receives separate DRBC approval for the natural gas well pad itself.

The five-member commission includes Delaware, New Jersey, New York, Pennsylvania, and the federal government. The Stone Energy water withdrawal docket vote was three to one, with Delaware opposed and New York unable to attend due to out-of-state travel restrictions.

“This docket protects other water users and preserves ecological flows, key objectives for all surface water allocations,” DRBC Executive Director Carol Collier said.

Stone Energy must comply with several conditions contained in the approved withdrawal docket before it initiates any site preparation or construction at the withdrawal location. For example, it must submit to the DRBC and obtain the executive director’s approval of a Non-Point Source Pollution Control Plan, an Operations Plan, and final site design plans and specifications.

The DRBC conducted a public hearing on February 24, 2010 and received over 1,700 written comments on Stone Energy’s proposed water withdrawal project and its application for the Matoushek #1 natural gas production well located in Clinton Township, Wayne County, Pa. Commission consideration of Stone Energy’s Matoushek #1 well pad project application will occur after new DRBC regulations are adopted.

Draft natural gas regulations are expected to be published for public review by the end of summer 2010. The rulemaking process will move forward expeditiously and will include at least one public hearing and an opportunity for the public to submit written comments on the draft before the commissioners consider adoption of the regulations.

The commissioners at the July 14 meeting also granted written requests submitted by several persons, a municipality, landowners’ organizations, and environmental groups to schedule an administrative adjudicatory hearing on whether to modify the executive director’s June 14, 2010 decision to require natural gas companies to obtain commission approval before installing natural gas exploratory wells, except for those exploratory wells that had received state drilling permits as of June 14, 2010. Some of the interested parties would like all exploratory wells to be excluded from commission review while other interested parties would like all exploratory wells to be reviewed. The requests were consolidated and the future hearing will be held as soon as possible in northeast Pennsylvania.

In addition, Executive Director Collier announced at the meeting that she will be granting the request by Hess Corporation to amend her June 14, 2010 supplemental determination to allow the company to drill two additional exploratory wells in Wayne County, Pa. Both wells, known as the Davidson IV and Hammond IV wells, received Erosion and Sediment Control permits from Pennsylvania before June 14.

The DRBC was formed by compact in 1961 through legislation signed into law by President John F. Kennedy and the governors of the four basin states with land draining to the Delaware River. The passage of this compact marked the first time in our nation’s history that the federal government and a group of states joined together as equal partners in a river basin planning, development, and regulatory agency.

Additional information, including the approved Stone Energy water withdrawal docket, will be posted on the commission’s web site at www.drbc.net.