Friday, August 1, 2008
Natural Gas Flows
"A $3.3 billion joint-venture deal between Chesapeake Energy Corp, and Plains Petroleum & Production Co. is the latest sign that a long-obscure swath of north Louisiana and east Texas is emerging as the country's hottest area for natural-gas exploration. ... Chesapeake ... has said its leases could produce as much as 44 trillion cubic feet of natural gas--nearly twice what the entire U.S. consumed last year. ... The agreement with Plains values Chesapeake's Haynesville territory at $30,000 per acre, more than six times what the company paid. ... But the area's natural-gas potential was almost completely unknown until March, when Petrohawk Energy Corp. discussed it at an analayst conference. ... On Monday, Petrohawk said its first horizontal well in the Haynesville field was producing nearly 17 million cubic feet of natural gas a day, and Chesapeake on Wednesday said it expects its wells to produce an average of 4.5 to 8.5 billion cubic feet over their lifetimes. ... Discovery of the Haynesville field is the latest in a series of developments that have remade the U.S. natural-gas industry in recent years. Higher prices and new technologies have allowed companies to extract gas from dense rocks called shales, a process considered too difficult and expensive until a few years ago", Ben Casselman at the WSJ, 3 July 2008.
I wish Chesapeake, Petrohawk, Plains and any other oil & gas company that drills in Haynesville good luck. We can use the gas. As prices rise all sorts of new techonologies will become economically feasible in the extractive industries.