A study by Alfred P. Sloan Foundation found that natural gas in the United States will increase in growth for the next 30 years before leveling off.
Even after that, according to the study, natural gas will only slightly taper off.
The data was not only talking about volumes of natural gas, but the cost of production as well.
For example, a million British thermal units at this time costs approximately $3.43 to produce, with estimates are future production will only rise to about $4 per million British thermal units.
Data were drawn from 15,000 wells drilled in the Barnett Shale formation in northern Texas by the University of Texas under the auspices of the Alfred P. Sloan Foundation. It is one of the first comprehensive studies performed to measure the economics of fracking in shale formations.
"We are looking at multi, multi decades of growth," said Scott Tinker, director of the Bureau of Economic Geology at the university and who headed up the study.
As for investment implications, the Barnett shale is complicated when broken down from well to well. There are some that do very well and others that have little natural gas in them. That means some companies will profit and others could be dragged down by the variable quantities scattered throughout the basin and over the numerous wells already dug.
Overall, the study concludes there is about 44 trillion cubic feet of natural gas that can be recovered in Barnett alone.
Tinker said to get the gas there is a need and room for about 13,000 more wells in the Barnett area.
As for other shale resources across America, which are undergoing similar studies, it is estimated there will be tens of thousands more natural gas wells drilled to access the huge resource.
Preliminary estimates of these other shale formations are what the growth projections through 2040 are based on.
Showing posts with label Natural Gas Production. Show all posts
Showing posts with label Natural Gas Production. Show all posts
Thursday, February 28, 2013
Friday, September 24, 2010
Citigroup (NYSE:C) Initiates Coverage on Petrohawk Energy (NYSE:HK)
Citigroup (NYSE:C) started covering Petrohawk Energy (NYSE:HK), starting them off with a "Hold" rating.
Citigroup analyst Robert Morris said in a note to clients that the downward pressure on natural gas prices will continue, and until that changes, there won't be much happening to change the rating.
While Morris likes the move away from conventional natural gas sources in North America to shale projects, especially Eagle Ford and Haynesville, until the supply and demand scenario changes, gas prices will continue to be low in the midst of an abundant supply.
Consequently, Petrohawk has the right production pieces in place, but until the fundamentals for gas prices improve, conditions will stay the same no matter how much resources a company may have.
This is why many natural gas companies have added oil assets recently in order to offset their exposure to natural gas pricing.
It's hard to see anything that will change this for some time.
Petrohawk closed Thursday at $14.95, gaining $0.24, or 1.63 percent. Citigroup has a price target of $19 on them. Not bad in these types of circumstances.
Citigroup analyst Robert Morris said in a note to clients that the downward pressure on natural gas prices will continue, and until that changes, there won't be much happening to change the rating.
While Morris likes the move away from conventional natural gas sources in North America to shale projects, especially Eagle Ford and Haynesville, until the supply and demand scenario changes, gas prices will continue to be low in the midst of an abundant supply.
Consequently, Petrohawk has the right production pieces in place, but until the fundamentals for gas prices improve, conditions will stay the same no matter how much resources a company may have.
This is why many natural gas companies have added oil assets recently in order to offset their exposure to natural gas pricing.
It's hard to see anything that will change this for some time.
Petrohawk closed Thursday at $14.95, gaining $0.24, or 1.63 percent. Citigroup has a price target of $19 on them. Not bad in these types of circumstances.
Wednesday, August 4, 2010
Chesapeake (NYSE:CHK) Level for Second-quarter Earnings, Revenue Up
Chesapeake Energy Corp. (NYSE:CHK) earnings were almost the same as last quarter, even though revenue in the quarter jumped 20 percent.
Earnings for the quarter came in at $235 million, or 37 cents a share, slightly down from the $237 million, or 39 cents a share last year in the same quarter.
Revenue on the other hand rose to $2.01 billion, increasing by 20 percent from $1.67 billion last year.
After excluding one-time items, the company generated profits of 75 cents a share, up from the 69 cents a share analysts had estimated.
The company was punished from a $214 million loss from it hedging strategy in gas, oil and interest rates. Redeemed debt with a charge of $42 million was the other major factor.
In the end, this is about the abundance of natural gas, which it'll take Chesapeake some time to decrease its exposure to.
At this time it accounts for the majority of production of Chesapeake, with oil and natural gas liquids making up 10 percent of the overall production of the company. Chesapeake said they're going to continually work on increasing liquids going forward.
According to CEO Aubrey McClendon, Chesapeake will have liquid production coming in at about 25 percent of overall production, and 40 percent of revenue from production.
To limit the consequences of low natural gas prices, the company will also cut back on drilling of their natural gas wells until prices rebound to at least $6 per 1,000 cubic feet.
Earnings for the quarter came in at $235 million, or 37 cents a share, slightly down from the $237 million, or 39 cents a share last year in the same quarter.
Revenue on the other hand rose to $2.01 billion, increasing by 20 percent from $1.67 billion last year.
After excluding one-time items, the company generated profits of 75 cents a share, up from the 69 cents a share analysts had estimated.
The company was punished from a $214 million loss from it hedging strategy in gas, oil and interest rates. Redeemed debt with a charge of $42 million was the other major factor.
In the end, this is about the abundance of natural gas, which it'll take Chesapeake some time to decrease its exposure to.
At this time it accounts for the majority of production of Chesapeake, with oil and natural gas liquids making up 10 percent of the overall production of the company. Chesapeake said they're going to continually work on increasing liquids going forward.
According to CEO Aubrey McClendon, Chesapeake will have liquid production coming in at about 25 percent of overall production, and 40 percent of revenue from production.
To limit the consequences of low natural gas prices, the company will also cut back on drilling of their natural gas wells until prices rebound to at least $6 per 1,000 cubic feet.
Wednesday, May 26, 2010
UBS (NYSE:UBS) Raises Petrohawk (NYSE:HK) Estimate
Shares of Petrohawk Energy (NYSE:HK) rose after UBS AG (NYSE:UBS) raised their estimates for the oil and gas company. UBS has a buy rating on the company and a price target of $28 through 2011.
Petrohawk is primarily a natural gas exploration, development and production company, although they do engage in oil production to a lesser degree.
The traded as high as $18.50 a share today, but has dropped back to near its opening of $17.87 a share as I write.
UBS said volume next year should increase for Petrohawk.
Petrohawk is primarily a natural gas exploration, development and production company, although they do engage in oil production to a lesser degree.
The traded as high as $18.50 a share today, but has dropped back to near its opening of $17.87 a share as I write.
UBS said volume next year should increase for Petrohawk.
Tuesday, May 25, 2010
Exxon Mobil (NYSE:XOM) Sells Global Partners (NYSE:GLP) 190 Gas Stations
Exxon Mobil (NYSE:XOM) has sold 190 gas stations to Global Partners LP (NYSE:GLP) for $200 million.
Global said their decision was based on the desire to increase profits by supplying retailers gasoline and diesel.
The gas stations are all located in the northeast United States, in the states of Rhode Island, Massachusetts and New Hampshire. There are 31 other gas stations in the region owned by independent retailers which are also part of the deal.
Exxon has been selling off their gas stations, which they now consider a non-core asset in order to put their attention on oil and natural gas production, which bring much higher returns.
Global said they're going to finance the deal either with an existing credit line or via capital markets.
Global said their decision was based on the desire to increase profits by supplying retailers gasoline and diesel.
The gas stations are all located in the northeast United States, in the states of Rhode Island, Massachusetts and New Hampshire. There are 31 other gas stations in the region owned by independent retailers which are also part of the deal.
Exxon has been selling off their gas stations, which they now consider a non-core asset in order to put their attention on oil and natural gas production, which bring much higher returns.
Global said they're going to finance the deal either with an existing credit line or via capital markets.
Wednesday, May 12, 2010
Canada Has More Natural Gas than Thought
Prior estimates of natural gas residing in Canada have been low because unconventional sources hadn't bee included in the estimates, which now are close ot 4,000 trillion cubic feet.
You can hear some of the natural gas companies groaning to know there is even more natural gas in North America, now that the United States has found huge deposits residing shale deposits.
But get too overcome by the huge numbers as recoverable natural gas in Canada, even with the overall reserves upwardly revised, stands at between 700 TCF and 1,300 TCF, according to the Canadian Society for Unconventional Gas
Even so, that's over double original estimates of 357 trillion cubic feet of marketable natural gas from conventional sources.
Canada estimates their natural gas reserves will now last the country over 100 years, including domestic consumption and exports.
You can hear some of the natural gas companies groaning to know there is even more natural gas in North America, now that the United States has found huge deposits residing shale deposits.
But get too overcome by the huge numbers as recoverable natural gas in Canada, even with the overall reserves upwardly revised, stands at between 700 TCF and 1,300 TCF, according to the Canadian Society for Unconventional Gas
Even so, that's over double original estimates of 357 trillion cubic feet of marketable natural gas from conventional sources.
Canada estimates their natural gas reserves will now last the country over 100 years, including domestic consumption and exports.
Friday, April 23, 2010
Oneok Partners (NYSE:OKS) Expanding Operations in North Dakota
Oneok Partners (NYSE:OKS) announced it'll be developing a new plant in North Dakota, investing over $350 million for the new facility, which will be near its already operating Grasslands processing plant.
Once the plant is operational, estimates are it'll produce about 100 million cubic feet of natural gas a day, which will effectively double the capacity of Oneok at that time.
Gas produced will be shipped via pipelines already in place to Oklahoma.
Still, the company is going commit about $200 million to develop more pipe expansions, connections and upgrades in the state.
All of this is in preparation for the explosion in gas production in the extraordinary Bakken formation.
Once the plant is operational, estimates are it'll produce about 100 million cubic feet of natural gas a day, which will effectively double the capacity of Oneok at that time.
Gas produced will be shipped via pipelines already in place to Oklahoma.
Still, the company is going commit about $200 million to develop more pipe expansions, connections and upgrades in the state.
All of this is in preparation for the explosion in gas production in the extraordinary Bakken formation.
Thursday, April 22, 2010
Petrobras (NYSE:PBR) Gas, Oil Production Down in March
Petrobras (NYSE:PBR) reported gas and oil production in March was down slightly, with gas and oil production combined reaching 2.556 million barrels of oil equivalent on a daily basis.
In February total gas and oil production for Petrobras was 2.561 barrels of oil equivalent a day, 0.2 percent more than March.
Domestic oil production for March increased to an average of 1.994 million barrels a day, a 0.3 percent gain. In February that came to 1.988 million billions a day for oil.
Internationally, crude oil production fell for the company, as it averaged 149,600 barrels of crude daily, dropping from the 151,400 average in February.
The main reason for the overall decline in March gas and oil production was decreasing demand for natural gas, as Petrobras has lowered its output in response to lower usage.
Natural gas production domestically dropped to 66.7 million cubic meters a day, falling from the 68.1 million cubic meters a day used in February.
In February total gas and oil production for Petrobras was 2.561 barrels of oil equivalent a day, 0.2 percent more than March.
Domestic oil production for March increased to an average of 1.994 million barrels a day, a 0.3 percent gain. In February that came to 1.988 million billions a day for oil.
Internationally, crude oil production fell for the company, as it averaged 149,600 barrels of crude daily, dropping from the 151,400 average in February.
The main reason for the overall decline in March gas and oil production was decreasing demand for natural gas, as Petrobras has lowered its output in response to lower usage.
Natural gas production domestically dropped to 66.7 million cubic meters a day, falling from the 68.1 million cubic meters a day used in February.
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