Diverging estimates by three different organizations with significant expertise in oil and natural gas assessments leave one wondering how much oil really is in the Bakken and Three Forks Formations? Read the details on the Trib.com website.
Here are the estimates….
USGS…. 4.3 billion barrels
North Dakota Geological Survey…. 11 billion barrels
Continental Resources…. 20 billion barrels
An article in the Houston Chronicle, a newspaper that closely follows the oil and gas industry in Texas and worldwide, refers to the Eagle Ford Shale as “one of the nation’s biggest oil and gas fields.”
Last year Indonesian LNG export facilities shipped 427 cargoes but only 362 are expected to go out this year. More at Reuters.
Qatar is a major exporter of oil and natural gas. Those commodities account for over half of the country’s GDP. Qatar ranks third worldwide in natural gas reserves and is the world’s leading exporter of liquefied natural gas. More at the Energy Information Administraion website.
“If we go back in time to the days before drilling and mining, real estate transactions were fee simple transfers. However, once commercial mineral production became possible, the ways in which people own property became much more complex. Today, the leases, sales, gifts and bequests of the past have produced a landscape where multiple people or companies have a partial ownership of or rights to many real estate parcels.” Quoted from the Geology.com article.
A rock layer below the Marcellus Shale could prove to be another incredible source of natural gas. The Utica Shale is thicker, more geographically extensive and has already proven its ability to support commercial production.
An article on the NewsOK.com website gives you a glimpse of what Ryan Miller, a geophysicist with Devon Energy Company, does on the job. He works on a team that investigates subsurface rock units for oil and natural gas.
Ukraine’s Ministry of Environment and Natural Resources claims that “the territory of Ukraine enjoys the biggest shale gas supply in the world.” Quoted in a Worldwide News Ukraine press release.
An interesting article on the EnergyTribune website is titled “The (Shale) Gas Renaissance”. It reviews how shale gas has gone from an insignificant commodity to the accelerating force of the US energy scene.
Graph modified from the Energy Information Administration.
This video provides an overview of shale gas, starting with the first gas well near Fredonia, New York in 1821 up through January 2010 and the major shale gas plays. The speaker is John Curtis, Professor of Geochemistry and Director of the Potential Gas Agency at the Colorado School of Mines.
The state of Indiana will enter into a $6.9 billion, 30-year contract to purchase natural gas produced from a coal-gasification facility in southern Indiana. The state plans to resell the gas to local utility companies. A goal is to keep their energy money within the state. More at Bloomberg.com.
Growth in the production rate of natural gas from shales will offset declines in other production sources and accommodate an overall increase in demand. Shale gas held 14% of the market in 2009 and that is expected to increase to 45% by 2035. More at the U.S. Energy Information Administration website.
Even though natural gas prices have fallen significantly and many in the industry say that there is a “gas glut”, Shell Oil Company is investing heavily in natural gas. President Marvin Odum says they will produce more gas than oil by 2012. More at CNN Money.
YPF, Yacimientos Petrolíferos Fiscales, the state-owned energy company of Argentina has discovered a large shale gas resource that could hold 257 trillion cubic feet of natural gas. More at Reuters.
From a Chief press release: Recent wells placed online in Northeast Pennsylvania [...] are averaging between 4.7 and 8.0 MMcfd with an average lateral length of 2,568 ft. [...] In Central Pennsylvania, two recently completed wells had an average test rate of 4.9 MMcfd and 5.3 MMcfd with lateral lengths of 4,864 ft and 4,143 ft respectively.
SeekingAlpha.com has a really interesting article on the wellhead side of natural gas economics that most people will be able to read and understand. The title is: “Estimating the Breakeven Costs of Shale Gas“.
“Shale gas development drove an 11 percent increase in U.S. natural gas proved reserves last year, to their highest level since 1971, demonstrating the growing importance of shale gas in meeting both current and projected energy needs,” said Richard Newell, EIA’s Administrator. “Louisiana, Arkansas, Texas, Oklahoma, and Pennsylvania were the leading states in adding new proved reserves of shale gas during 2009,” he said. Quoted from the EIA Summary: U.S. Crude Oil, Natural Gas, and Natural Gas Liquids Reserves, 2009.
The Energy Information Administration has published a map that shows the increase in wet natural gas proved reserves by state for 2008-2009. There were huge increases for the states with large shale gas plays such as Marcellus Shale, Haynesville Shale, Fayetteville Shale, Eagle Ford Shale and the Barnett Shale.
The Baker Hughes Rig Count stands at 1687 for November 24, 2010. That is 550 more rigs working compared to just one year ago on November 25, 2009.
If you are not familiar with the Baker Hughes Rig Count, it is a weekly tally of the number of oil and gas rigs drilling in the United States. Their website features an interactive map and graphing tools. Check it out.
Steve Kirchhoff, the ExxonMobil vice president for natural gas, reviewed a number of factors that will determine the long-term direction of the natural gas industry in the United States. More at PennEnergy.com.
Chesapeake Energy had a Barnett Shale well in north Texas produce an average of 17.8 million cubic feet per day for the month of September. The well now holds the Barnett Shale record for monthly natural gas production from a single well. More at iStockAnalyst.com.
Southwest Energy says that they need 10 to 12 wells per square mile to effectively drain the Fayetteville Shale in the Arkansas Arkoma Basin.. That about 53 to 64 acres per well. More at PennEnergy.com.
Working natural gas in storage set another new all-time record increasing to 3,843 billion cubic feet (Bcf) as of Friday, November 12, according to the Energy Information Administration’s Weekly Natural Gas Update. The implied net injection for the week was 3 Bcf.
Half of Pennsylvania’s Marcellus Shale natural gas production is coming from Bradford and Susquehanna Counties in the northeastern part of the state. More in the Philadelphia Inquirer.
Lots of shale gas producers are moving their focus to parts of the plays where natural gas liquids can be produced – because of their extra value. The problem now is…. How to get them to market? or How to develop a market? More at Platts.com.
An article on the Business Insider website argues that the Marcellus shale will be a financial failure for shareholders of the companies involved in exploration and production. The reasons: low natural gas prices and rapid well decline curves.
If you think that this might be true maybe service companies and pipelines are better ways to invest.
The EIA Monthly Energy Review has a long-term chart of primary energy consumption. During the economic downturn of 2008-2009 the consumption of petroleum and coal fell significantly, however, the consumption of natural gas remained steady. Low natural gas prices and increased use of gas at electric power plants helped consumption remain steady.
Will natural gas companies shut-in some of their wells in response to low gas prices? A Reuters article reports that Exxon does not plan to shut in the former XTO Energy wells but ConocoPhillips has shut-in some wells.
There are a number of reasons why some companies do not shut-in wells. These include: the possibility of even lower prices in the future, difficulty restarting the well and obtaining original production levels, long-term supply agreements and more. For more details see the “Industry and Market Structure” page of NaturalGas.org (fifth paragraph from the bottom).
North Dakota should set an all time record for oil production this year and account for more than 6% of total US crude production. Ninety-Five percent of the State’s drilling activity is in the Bakken Shale and the Three Forks-Sanish Formation. More at the StarTribune.com website.
Low-cost natural gas from shale plays is moving electricity generation away from coal, delaying development of alternative energy, killing LNG import projects, launching LNG export projects, changing the geography of energy transport, demanding thousands of miles of new pipelines, motivating homeowners to install gas heat. More in an article on the StarTribune.com website.
