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Shale Gas: Promises, Promises, Promises

Desert Fox: I believe the rapid decline in Total Texas Production is due to the decline in new wells being drilled. No one has masked the very high decline rates of shale wells. In fact, everyone admits and premises it! 70% in year one is a low end number but all are using this in their calc's. The key with the shale plays is continuing to drill in a manufacturing-type operation. I still think Dr. Berman's analysis is flawed. But confidentiality issues prevent from showing/discussing details.

Two Ways to Profit from New York's Uncertainty About Drilling for Natural Gas

makeitsafe: you are a fool. the only difference between horizontal well frac'ing and the frac'ing that's been done for decades is that the well is laying horizontal. BTW, these wells are 6000 to 13000 feet below the surface and several thousand feet below any known fresh water aquifer. And the chemicals used are very similar to those found in your home today...Formula 409, Windex, etc. Do you ever, ever, ever, get Formula 409 in your sink or bath tub? Where does it go when you rinse it? Answer: into the fresh water supply! These chemicals are used in very very very low percentages (think less than 1%).

This is just another Greenie Weenie attempt at ruining American Industry.

And the difference between "alleged" and "proved" is a huge one! Anyone can "allege" that someone killed another person, but you gotta prove it! Many of the cases I've seen of "alleged" pollution of ground water by frac jobs are just crappola! The science doesn't back up the claim, and by science I mean simple things like physics, geometry, fluid dynamics.

Shale Gas: Promises, Promises, Promises

Tudor Pickering Holt gave a point by point assessment of Berman's evaluation. They, in short, said Berman is Flat Out Wrong and way out of his league. We shall see.

How Much Natural Gas Remains in the USA?

To whomever ranted about environemental concerns: get over it! You are quoting alarmists who are blowing a lot of the frac danger completely out of proportion. 1st, the amount of water used in fracing wells in a given active county is less than 10% of the water used in watering golf courses. Gee, that's a lot of water.

Second, all these "nasty's" you talk about are found in your grocery store in things like Formula 409 cleaner.

The good folks of New York don't want anyone drilling for natural gas but will be the same people screaming when their natural gas costs them $15/mcf or when they are beholden to Middle Eastern Countries for the import of LNG. Oh, yeah, they won't allow that either. Maybe we should let them freeze in the winter a while.

How Much Natural Gas Remains in the USA?

Mark Anthony: While I salute your questioning the reserves/resources available, I give you failing marks for the actual execution of the questioning!

First: shale gas is economical at somewhere between $5 and $7 per mcf. There is an ever-decreasing amount of risk to these resource volumes in the shales. So discount the shale gas at your own peril. Even if only half of it is actually recoverable, then we still have a large volume of reserves to transition us to another source.

Second: someone earlier pointed out excatly that proven reserves are dependent on price. Push the price of gas up to $10 and you'll see an increase in proven reserves and you'll also find exploration activity picking up. Those "undiscovered" resources are based on past experience and geological studies of new basins. Start drilling and you will see these resources discovered.

Again, at today's prices, no there is not 75 years of reserves. But let the price rise a bit to that $7 range, and you'll see a bunch of new reserves. Get the goofy government off of our backs and you'll see even more.

One thing I do agree with you on: there is a "crisis" looming. But "crisis" needs to be defined: I view the crisis as gas prices rising to maybe $10 or more for a short period of time, but then drilling will rapidly increase, supply will outstrip demand and prices will decline. We'll constantly be in this up and down tug of war but at a reasonable price (less than $15/mmBtu) there is plenty of gas!

Natural Gas Production Declines Are Becoming More Evident

Elliott: you may be right but not exactly for the reason stated. Could it be that storage was a bit higher due to lower demand...the other side of the story? Also, need to adjust storage additions to account for weather.

Supply Glut Pressuring Natural Gas

Don't have to be comparable to developing countries, but also don't have to be as ridiculous as the UAW contracts that pay folks when they aren't working, that pay them huge percentages over their counterparts at Hyundai and Toyota and Honda plants IN THE U.S.A. Hyundai's plant in Alabama is working well at a fraction of the labor cost of the GM plants around the country. Difference? Union vs non-union.


o
> those in developing countries would "mirror reality", right?

Supply Glut Pressuring Natural Gas

Fully agree! I'd add that the relentless collapse of u.s. manufacturing was driven in large part by the overreaching of two groups: organized labor and environmental terrorists organizations...both joined at the hip by the Democratic Party! Labor costs have gone through the roof due to benefits packages that don't mirror reality or the competitive nature of the world economy. Keeping up with ever changing environmental regulations that in many cases have no basis in cost/benefit analysis is also a driving force behind manufacturing leaving the country. With that manufacturing base leaving, the natural gas industry has lost a vital demand element.


On Aug 31 12:28 PM john s. gordon wrote:

> the relentless collapse of u.s manufacturing has seriously wounded
> the natural gas business.

Supply Glut Pressuring Natural Gas

Actually Elliott its been done for years, at least since WWII. The South Africans led the way with Fischer-Tropes (sp?). Gas-To-Liquids is a proven commercial process and is even more economic when gas prices are low and oil prices are high. Go to Syntroleum's web site or to Shell and/or Exxon. Make sure you look up GTL, not to be confused with LNG (liquified natural gas). These are two completely different processes.


On Aug 31 11:31 AM Elliott wrote:

> On Aug 31 10:03 AM Mad Hedge Fund Trader wrote:

Oil Inventory Report Fuels a Market Rally

Zachary: I love CHK and their management team, I really do, but never would I thought I'd see the phrases "Chesapeake Energy" and "one of the most disciplined" in the same sentence!!!

C'mon. Great, opportunistic, undervalued company but certainly not the most disciplined!

Energy Investing: Natural Gas Looks Especially Interesting

Laughing: I'd love for your scenario to come true but looking at production, demand and storage figures, we are still seeing way too much gas. The folks in the Haynesville and the Marcellus aren't cutting back on their drilling and the production glut is still where it was back in January. I see prices at $6 or so going into the winter of 2010!

Energy Investing: Natural Gas Looks Especially Interesting

Oh, my above comments aren't meant to be a slam on the recommendation of SWN...they are a great company and a screaming buy for the LONG TERM, but the premise given in the article is fundamentally flawed! Or at least tainted with ignorance on his part.

Energy Investing: Natural Gas Looks Especially Interesting

Marc:

You quoted that guy saying that SWN has a huge piece of LNG. Have you checked that out? I'm thinking that guy is completely wrong! I looked over their web page and found nothing even closely resembling a linkage to LNG other than the fact that SWN produces natural gas.

Since the guy is so completely off base and factually incorrect on such an elementary point, can he really be trusted as a financial analyst?? When all it takes is the worldwide web and a quick visit to a company's web page to do very elementary research (or maybe pre-school research), and this guy gets it wrong, then I'm guessing his credentials as an analyst are pretty shaky at best.

If I were you, I'd research the guys I quote in my article. This guy is out to lunch!

Natural Gas Should Get a Boost from China's New Demand

Freya: let me know when you get your DD complete and I'd be happy to provide add'l input as you reach conclusions. Since I work in the LNG business, I can certainly help out. The DD shouldn't be too difficult as all of these plants have to go through FERC certification and any export requires an export license. And, all of these plants are multi-billion projects, so they just don't happen and lots of planning, investing and press!

Natural Gas Should Get a Boost from China's New Demand

Freya: There is only one LNG liquifaction plant in the US and it is up in Alaska. It exports relatively small amounts of LNG and even that is being challenged by U.S. Congressmen.

All other LNG facilities in North America are re-gas plants where LNG is taken from its liquid form off of the carriers, converted to gas and shipped into our pipeline system for consumption. Chenierre requested approvals to re-export LNG...they take the liquid form into their storage tanks and then rather than gasify it for the pipeline, they turn around and put it back on ships in liquid form for re-export. Note that the LNG stays in liquid form the entire time. This is only helpful when your storage of liquid form gas is filling up. if not, why take the LNG off of a ship to begin with? Just redirect the ship to another port.

All of the above is a long way of saying that here in the Lower 48 and Mexico, we CANNOT take natural gas, liquify it and export it. We don't have the right facilities and it would take billions of dollars to build one. Its been looked at before and the economics just aren't there, particularly with all of the competition from Qatar and Australia. There is a plan up in British Columbia to take Canadian gas and liquify it for export. Long way away from building the plant, though, as the economics will be challenged.