TXDESERTFOX

Shale Gas: Promises, Promises, Promises

Total Texas natural gas production peaked in January 2009 at 675.2 BCFG/Month and has declined at a 30% per year rate to 572.7 BCFG/Month during August 2009. This decline in natural gas production is due to the rapid decline of Barnett Shale Gas Wells in the Fort Worth Basin and the Haynesville Shale Gas wells of East Texas. These figures are taken from the Texas Railroad Commission monthly reports.

Dr. Berman published an excellent article in the October issue of World Oil as follow-up to his previous articles discussing these shale gas plays. As a practicing Petroleum Engineer of 44 years I have also investigated the Barnett, Fayetteville and Haynesville Shale Plays and concur with his findings.

Texas Total natural gas production includes all gas produced in Texas, both associated “casinghead gas” and gas well gas. In January 2003, total natural gas production was 477.4 BCFG. Production steadily increased to 675.2 BCFG in January 2009. The increase in production resulted primarily from completion of thousands of shale gas wells. When the pace of drilling and completion in the two shale plays diminished, the rapid decline being masked became apparent.

Beaten Down Natural Gas Likely to Stay Down, Making Producers a Short

TX Total Natural Gas Production:

Dec 2007 613.2 BCFG
Jan 2008 543.6 Jul 2008 586.2 BCFG
Feb 503.6 Aug 595.1
Mar 570.6 Sep 570.8
Apr 552.6 Oct 626.9
May 577.1 Nov 604.2
Jun 566.6 Dec 606.5
Jan 2009 568.9

Source: TX RRC

This looks like a 33% per year decline as stated by XTO's Bob Simpson. If your shale plays are low cost, we may not be on the same planet.