Thursday, October 07, 2010
Natural gas production in the US could stay the same or even rise despite hefty capital spending that exploration and production companies plan to shift away from pure gas drilling, a top industry researcher said Thursday.
That is because the money will go into liquids-rich plays that contain sizable volumes of natural gas liquids or oil that contains associated gas, Rusty Braziel, managing director of industry consultants Bentek Energy said at a National Energy Services Association energy forum.
“Some companies could sell their liquids and give the gas away for free and still make money," Braziel said.
He noted Chesapeake Energy, for example, recently said it will adjust capex on liquids-rich plays from 10% in 2009 to 32% this year and 55% in 2012. Devon Energy and Petrohawk Energy are similarly have said they plan to spend more on plays that contain a larger percentage of liquids.
Shale player Petrohawk Energy has estimated its rate of return in the largely dry-gas Haynesville Shale in East Texas and northwest Louisiana is around 25% at a $4/Mcf gas price, said Braziel.
To read the complete article, please visit: www.platts.com.