Some actual good news in a sea of bad? Looks like drilling in the Barnett Shale fields will bring an estimated growth in natural gas production of 9% just this year alone. Jobs abound too, and it seems to be an investor’s dream. Screw Wall Street....I might have to put on a ten gallon hat and head on down to the Lonestar state. Save a horse, ride a cowboy, as they say. Yeehaw.
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drill, baby, drill!
or as Thomas Friedman says... Invent, baby, invent? (Alternative energy solutions)
There are several lucrative formations out there with an abundance of drilling opportunities. Haynesville Shale in North Louisiana/East Texas comes to mind. Aggressive drilling over the next few years will probably quell some supply concerns in the short term, but the question is whether this production growth is sustainable.
www.peakoil.net
Yes the horizontal drilling and multi-frac technology has really unlocked the potential of these unconventional gas plays. It's not just the Barnett - there's the Marcellus, Haynesville, Horn River & Montney up in Canada, and even the Williston Basin unconventional oil.
The downside is that the increase in production from these shale gas plays has just hammered natgas in the past 2 months. It is rough out there. A lot of these plays will cease to exist if gas passes $5.
Let's get behind the Barnett.
I was having a similar conversation at work the other day about this issue. A guy I work with told me that either last year or early this year there was a period of time in the west when cash nat gas trading went close to zero, but producers were still producing because they had hedged a decent percent of their production. I have been reading some reports that suggests increased production out of these shales will put downward pressure on nat gas prices until 2010, but more in the $7-$8 than the $5 level. Long term I do not see the large energy firms not drilling, but the smaller operations might get squeezed out.
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