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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (89661)	5/1/2012 11:15:30 AM
From: Cogito Ergo Sum	Read Replies (2) \| Respond to of 218879

On the shale gas market.. In the US it was not there and then it was huge.. I am only thinking about how China moves when it decides something is a priority .. :o) See the last section of this post. Message 28116851 Entire post is good.. Johnny provides some great some..

To: Haim R. Branisteanu who wrote (89661)	5/2/2012 11:16:23 AM
From: Cogito Ergo Sum	Read Replies (1) \| Respond to of 218879

Reason 9: Between the Lines – By-products One reason that North-American gas producers continue to drill select wells is because certain shale reservoirs contain lots of Natural Gas Liquids (NGLs). These liquids, comprised of bigger carbon molecules than the methane that is natural gas, trade at a significant premium to natural gas. Furthermore, these NGL-rich natural gas wells often also produce some oil. The presence of these bonus products means producers in NGL-rich areas can continue to operate because revenues from the sales of by-product NGLs and oil compensate for rock-bottom natural gas prices. The result is upside-down – for these operators natural gas is still the primary product by volume but is the least-important product by value – and ironic, because by continuing to add to the natural-gas supply glut in North America their gas output is actually perpetuating the gas pricing problem. But the point is that the price of gas doesn't matter: as long as the NGLs and oil continue to flow out of these wells, the operator will remain profitable. A similar paradigm does not exist in an oil well with natural gas as a by-product, because of course gas is worth far less than oil. If the price of oil began to fall dramatically, companies would simply stop drilling and there would be no upside-down by-product incentive to continue. Not sure I agree with all the conclusions in the entire report.. Message 28119058