Apparently the in the Marcellus Shale, the cost of extraction is lower and the price received is higher. Therefore it is going to be profitable at lower prices than in other domestic plays. And in order to get all this NG to market, they will need what ESA hs to offer no matter what the price of NG is.
<With more built-for-purpose horizontal shale rigs active in places like the Marcellus shale, a few new, successful horizontal units can bring forth a level of production that may have taken 10 or 20 vertical wells to equal only a few years ago.
For example, to date, CXG has drilled 5 horizontal wells with costs declining from $5.3mm for the first well to $3.8mm for the fifth well. The company expects the next horizontal well to cost ~$3.6mm. Average IP-rate for the first 5 horizontal wells was 4.3 MMcf/d. If we assume the lower horizontal well cost of ~$3.8mm with a 3 Bcfe EUR on 40-acre spacing......
In the shale-supply driven scenario, big regional shale leaders like Range Resources (RRC) could continue to make money producing high volumes at prices at or near the marginal cost of production, especially since Marcellus gas is usually sold at a Nymex premium in the Northeast market due to savings on transportation.>
As far as the concept of the country being awash in a huge wave of LNG imports, who knows. That would certainly spell the death knell for energy independence.
From what I understand the EIA has estimated that LNG imports will only be marginally increased at least for this year. I hope to come across a good link for that, but I forget where I read it.
<While the EIA estimates LNG imports to average about 369 BCF, estimates vary widely. “We are going to be awash in natural gas and could have $2 gas”, says Steve Johnson, president of Houston-based Waterborne Energy Inc., which tracks LNG shipments. He also predicts that the US will see 1.1 TCF of gas delivered to the US in 2009 as repairs to some LNG export facilities overseas are completed, new projects come online and seasonal shifts in global demand increase the amount of LNG in the market.>
In other words and as always: "It's anybody's guess." |
