| Shale Gas & Other Unconventional Plays

15th Mar '10 by ManSiarad

18 comments 5527 reads

I have just come across this website, which appears, at a quick glance, to include a wide collection of articles from sources like the FT, Business Week, Oil Daily etc about unconventional gas plays - shale gas and the like - mentioning many of the larger, and smaller, companies involved, from Exxon down to unlisted tiddlers.

I've not yet had time to go through everything but It might be worth trawling through - and, with luck, it'll get regularly updated with the addition of more articles..

http://naturalgasforeurope.com/

I hope it's not duplicating anything posted before

Man Siarad

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ManSiarad

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18 comments

ManSiarad

17th Mar '10

A bit more discussion of Aussie firms getting into shale gas etc

http://www.theaustralian.com.au/business/mining-energy/some-aussie-firms-position-themselves-as-early-movers-in-shale-gas/story-e6frg9ex-1225840644921

Thanks to Hal's daily round-up In Another Place

Man Siarad

ManSiarad

1st Apr '10

from OGJ - a sheaf of shale gas permits in France

http://www.ogj.com/index/article-display/3578055153/articles/oil-gas-journal/exploration-development-2/2010/03/shale-gas_permits.html

PARIS, Mar. 31 -- French energy authorities have officially awarded shale gas exploration permits after some delay due to the number of companies that competed for licenses in the southeastern part of the country.

Besides tiddlers like Egdon (see separate thead), I note that Total and GDF-Suez are among larger firms involved along with a couple of Texas firms - presumably trying to make use of their experience gained in the US?

Apropos of which, this (from Hal's round-up yesterday on TMF)

http://www.resourceinvestor.com/News/2010/3/Pages/Shale-Gas-going-global-QA-with-.aspx

...

Of course these technologies are 40 years old, but only in the last decade have they been perfected so they can get oil and gas out of shale rock.

Being able to make an economic hydrocarbon discovery in rock as opposed to the regular loose sands is about as simple as I can make the opportunity. It opens up the probability of billions of new barrels of oil to be discovered over the coming decade or two. Where is the next Saudi Arabia sized shale oil deposit? I think we could find out in the next decade.

// <EM> </EM>

These technologies were first perfected in the Barnett shale in Texas over a decade ago, and has now become the big growth engine of oil and gas production from Louisiana to northern British Columbia.

Literally tens of billions of dollars in stock values have been created for oil and gas investors by North American oil and gas plays like the Barnett, the Haynesville gas shale, and the Bakken and Cardium oil formations.

But the question for investors is now – what’s next for shale oil or shale gas? Where will the industry create billions in value next? Dave is much more technical than I am – he’s a geologist, I’m a journalist – so I asked him to share with readers where he sees the next big opportunities in shale oil and gas, for investors.

“These technologies are quickly going to move around the world,” he said. “Foreign companies are scrambling to learn the tricks and “take the show on the road”. We’ve seen a slew of farm-in deals from companies like Total on shale gas acreage in Texas, and other foreign companies in other basins. More than production, these companies are looking to learn from their North American partners, and use this to unlock new basins abroad.”

Anyone like to comment?

Man Siarad

cladd

25th May '10

This comment has been moderated

ManSiarad

24th Sep '10

Thanks to Hal on TMF for spotting this:

http://www.resourceinvestor.com/News/2010/9/Pages/Investing-in-the-Paris-Basin-Shale-Oil-Play.aspx

The Paris Basin shale oil play in France has the potential to be 10 times the size of the Bakken play in North America, and some high profile exploration is beginning soon.

Estimates range from just a few to many tens of billions of barrels of oil in the Paris Basin. Much like the North American shale plays, these formations have been drilled through many times – there are over 1,000 wells drilled into the Basin – so exploration risk is low. It’s completion risk – how to best unlock the oil from the rock – that is the main risk.

So there is a lot of data, which makes exploration much less risky. It also means that local residents are used to having oil wells drilled in the region – unlike New York state.

Activity by explorers in this part of France has been growing, and is now hitting a fever pitch. A huge land race is underway, with applications for more than 1.6 million acres pending approval for several companies, including Toreador Resources (TRGL-NASD)* in the US, Vermillion Energy (VET.UN-TSX) and Realm Energy (RLM-TSXv) in Canada.

Exploration – real drilling – in the Paris Basin will ramp up this fall. Toreador is the purest play. In May they announced an exploration deal with Hess Corp. (HES-NYSE) that could be worth as much as $265 million for 50% of Toreador’s 600,000 acres in the play. They spud their first well into the play in Q4 2010. It will be one of the most watched wells in the world...

Is anyone following this sufficiently closely to be able to give an up-to-date list of companies involved?

Man Siarad

doverbeach

24th Sep '10

Not following the area closely, but Sterling Resources has a holding there: http://www.sterling-resources.com/franceonshore.html.

ManSiarad

25th Sep '10

Following up on the topic of the search for viable shale gas production in Europe, I've come up with these further weblinks, for those interested in researching further.

First this:

http://blogs.ft.com/energy-source/2010/03/12/where-the-european-shale-gas-plays-are/

within which is this brief summary, in company & country format

http://www.epmag.com/Images/PDFS/shaleGas.pdf

A lengthy overview here

http://www.epmag.com/Magazine/2010/3/item53280.php

Key concerns appear to be the potential environmental impact of drilling lots of wells in a small (and populated) area, along with the need to obtain, and to dispose of, lots of water.

There IS a player in the UK - Cuadrilla Resources, which, through its Bowland Resources subsidiary, is drilling near Blackpool. Some information in this article in the Guardian from July:

http://www.guardian.co.uk/business/2010/jul/25/shale-gas-drilling-blackpool

Twenty years ago, British Gas drilled a couple of exploratory wells in the north-west in an attempt to extract gas in commercial quantities.

Cornelius said: "They penetrated through the Bowland shale [part of the same geological formation that extends to Blackpool], and the old indications were that there was gas in that shale. So we decided that this area would be prospective, and after about a year's worth of work we decided that this was the place to start."

He added: "We're quite confident that we'll find gas – it's just whether we find gas in economic quantities. I don't think we'll ever be like the US, but I think there will certainly be the possibility that we'll find significant volumes of gas in various parts of Europe, which will be potentially commercial.

A more recent BBC story (8th September) is here.

http://www.bbc.co.uk/news/science-environment-11175386

The major shareholder in Cuadrilla is Australian-based AJ Lucas

http://www.lucas.com.au/Home.htm

who describe themselves as

Australia’s only complete exploration-to-market coal seam gas service. Drilling, well completion and maintenance, gathering systems and pipelines.

so should have some relevant knowledge.

Their website notes:

Cuadrilla was formed in September 2007 as a privately held exploration and production company focused on bringing together leading unconventional oil and gas explorers, developers and technologists to unlock untapped unconventional resource plays in selected parts of Europe, in an environmentally and socially acceptable manner...

Cuadrilla has applied for, and in some cases been granted, exploration licences totalling in excess of 1.5 million acres in the UK, Holland, Spain and Poland. In addition, Cuadrilla has designed, overseen the manufacture of and delivered state of the art cementing and fracture stimulation equipment

Lucas were founding shareholders and have so far invested over Aus$ 50 million in the company. They hold 40.93 per cent.

Another key shareholder is the Riverstone/Carlyle Global Energy and Power Funds, a group of energy-focused private equity funds managed by Riverstone Holdings LLC, who put US $ 58 million into Cuadrilla in February this year.

http://www.mining-reporter.com/index.php/component/content/article/653-lucas/2867-riverstone-llc-invests-us58-million-in-cuadrilla-resources-

Riverstone Holdings has Lord (John) Browne, ex-BP boss, as one of its managing directors. Again, one assumes he should have access to relevant knowledge about the shale gas potential. Lots of money going into Cuadrilla, anyway.

A long way to go before (and if) commercial viability of shale gas in the UK is proven, but perhaps worth keeping an eye on the current work.

Man Siarad

ManSiarad

29th Sep '10

And a bit more from Poland.

http://www.ogj.com/index/article-display/3590240726/articles/oil-gas-journal/exploration-development-2/2010/09/vertical-wells_to/QP129867/cmpid=EnlDailySeptember282010.html

By OGJ editors
HOUSTON, Sept. 28 -- Lane Energy Poland Sp.z o.o., Warsaw, plans to stimulate two vertical wells to test shales in Paleozoic formations in the Baltic basin in north-central Poland.

The company has drilled Lebien LE1 and cored the target shales and is drilling Legowo LE1. The unconventional gas program targets shales as deep as 3,500 m.

The drillsites, 50 km east and 20 km south, respectively, of Gdansk, are within 15 km of the Polish gas pipeline network.

A limited number of frac stages is planned at each well, said Kamlesh Parmar, Lane Energy Poland country manager. The shales are of Silurian and Ordovician age.

Lane Energy Poland employed a mix of locally provided and Schlumberger-managed services at the wells.

passinthru

30th Oct '10

Shale Gas—Abundance or Mirage? Why The Marcellus Shale Will Disappoint Expectations

http://www.theoildrum.com/node/7075#more

Shale gas plays in the United States are commercial failures and shareholders in public exploration and production (E&P) companies are the losers. This conclusion falls out of a detailed evaluation of shale-dominated company financial statements and individual well decline curve analyses. Operators have maintained the illusion of success through production and reserve growth subsidized by debt with a corresponding destruction of shareholder equity. Many believe that the high initial rates and cumulative production of shale plays prove their success. What they miss is that production decline rates are so high that, without continuous drilling, overall production would plummet.

The so-called shale gas revolution promises E&P opportunities that are geographically immense with no barriers to entry. These ventures supposedly have no risk. Because of shale plays, we are told that there will be an abundant supply of inexpensive gas for 100 years. And the E&P companies involved will all earn big profits. Is there precedent for this improbable combination of make-believe business assumptions that did not end in disappointment?

A slightly emotive article. I think there is much underlying truth in this overview though. My instinct is to think that the technological advance in horizontal drilling and fracturing has been way oversold. If I was to invest it would be with the service aspect of the industry and not the E&P companies.

Passinthru

ManSiarad

7th Nov '10

A bit more news - ExxonMobil to pursue unconventional gas plays in Germany:

http://www.energy-pedia.com/article.aspx?articleid=142818

and Leni Gas and Oil have attracted two major German players to look at their Spanish acreage .

http://www.energy-pedia.com/article.aspx?articleid=142849

Not something I really understand just yet and I note passinthru's cautious comments above. I suppose that sinceExxonMobil are interested, I should take a closer look. On the other hand, given the Falcon fiasco, despite ExxonMobil involvement, (yes, that still hurts ! ) I suspect I'll be on the sidelines here for a while to come!

Man Siarad

djpreston

7th Nov '10

Following up on Passinthru's comment re service co's, one service co, very much worthy of consideration, would be Calfrac (CFW.T).

Calfrac, as the name kind of implies, is a leading Pressure Pumper ie a fracturing outfit. The results last week simply destroyed every analyst estimate I've seen and they are now scrambling to raise forecasts. Its very well run and if you like frac'ing then its worth a looksee.

Its not a doubler over night but I'd see it as a C$35 stock.

Mattybuoy

8th Nov '10

Like most things resource-related you get a far better choice if you venture outside the LSE.

A few companies which have large land positions in new shale oil frontiers are:-

Toreador Resources (NASDAQ:TRGL) - Paris Basin, 50% JV with Hess.
Vermilion Energy Trust (TSX:VET) - Paris Basin (also has a whole bunch of other stuff and pays a large divi)
Primary Petroleum (TSX-V:PIE) - Alberta Bakken (which is actually in Montana)
Tag Oil (TSX-V:TAO) - East Coast Basin, New Zealand

There are also a boatload of stocks in North America who are better established and where you could still get good growth going forward.

I find the site below to be very useful when looking for stocks in this area:

http://oilandgas-investments.com

NGFE

29th Nov '10

Another major joins the search for shale gas in Poland

http://naturalgasforeurope.com/eni-to-search-for-shale-gas-in-poland.htm

djpreston

29th Nov '10

Good spot NGFE.

That's the reason behind the surge in interest in San Leon Energy (LON:SLE) today. They're starting to get a bit more notice with a lot of very good options across many plays. Poland is the most immediate with the Talisman JV. Their explo guy, John Bruggenhagen is very highly regarded. Surprised it (SLE) doesn't get more coverage really.

djpreston

29th Nov '10

Speaking of which, there's a big conference on Shale Gas in Europe starting tomorrow through to the 2nd in Warsaw, john Buggenhagen is one of the speakers:

http://www.terrapinn.com/2010/shalegas/SPK-mr-john-BUGGENHAGEN.stm

repobear

9th Mar '11

I think there are several money making possibilities mentioned here and I like the look of one in particular, other than SLG;-)

http://seekingalpha.com/article/257082-kevin-shaw-horizontal-drilling-an-oil-gas-game-changer

DYOR,

repo

emptyend

22nd Sep '11

Cuadrilla has garnered itself a great deal of publicity this morning for its gas-in-place claims for the Blackpool area:

Preliminary wells drilled around Blackpool have uncovered 200 trillion cubic feet of gas – equal to the kind of recoverable reserves of big energy exporting countries such as Venezuela, according to Cuadrilla Resources, a small energy company which has the former BP boss Lord Browne on its board. It said up to 800 more wells might be drilled in the region, creating 5,600 jobs and promising a repeat of the "

The CEO was on Five Live Drive last night, being interviewed by their "business reporter" Steph McGovern....whose ignorance of matters relating to business (and the topic she was interviewing about) once again shone through:

CEO: "......we think there could be 200 trillion cubic feet of gas in place"

SM: ...pause......"...errr....is that a lot of gas?"

I nearly drove off the road..... ;-)

peterg

22nd Sep '11

I nearly drove off the road..... ;-)

Listening to the news while driving should probably be treated in the same way as using a mobile phone, the possibility of severe impairment to driving ability is probably too dangerous to be tolerated :-)

As an aside, what sorts of recovery are likely from tight gas fields? 10%? Still a lot of gas, potentially. I can forsee lots of fun trying to get permission to drill 800 holes around Lancashire. - Perhaps the Beatles knew more than they were letting on?

emptyend

22nd Sep '11

Still a lot of gas, potentially. I can forsee lots of fun trying to get permission to drill 800 holes around Lancashire. - Perhaps the Beatles knew more than they were letting on?

LOL :-)

I've little doubt that the trawling of a large (very large....ginormous) figure in the media is aimed at preparing the ground for a political offensive for drilling permissions (always assuming they get a clean bill of health for having triggered the recent earthquakes in Blackpool...results of the investigation into which are apparently now due in a few weeks time).

Where is our Blackpool-born correspondent when he's needed?

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Shale Gas & other unconventional plays

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ManSiarad

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