• 4 minutes Is The Three Gorges Dam on the Brink of Collapse?
  • 8 minutes The Coal Industry May Never Recover From The Pandemic
  • 11 minutes China Raids Bank and Investor Accounts
  • 52 mins Sources confirm Trump to sign two new Executive orders.
  • 21 mins CV19: New York 21% infection rate + 40% Existing T-Cell immunity = 61% = Herd Immunity ?
  • 13 hours Why Wind is pitiful for most regions on earth
  • 6 hours In a Nutshell...
  • 14 mins No More Love: Kanye West Breaks With Trump, Claims 2020 Run Is Not A Stunt
  • 2 hours A Real Reality Check on "Green Hydrogen"
  • 1 day During March, April, May the states with the highest infections/deaths were NY, NJ, Ma. . . . . Today (June) the three have the best numbers. How ? Herd immunity ?
  • 16 hours Why Oil could hit $100
  • 4 mins Better Days Are (Not) Coming: Fed Officials Suggest U.S. Recovery May Be Stalling
  • 4 hours Putin Paid Militants to Kill US Troops
  • 4 days Joe Biden to black radio host, "If you don't vote for me you ain't black". That's our Democratic Party nominee ?
  • 2 days Coronavirus hype biggest political hoax in history
Moscow Backs Russia's Fastest Moving Energy Company

Moscow Backs Russia's Fastest Moving Energy Company

The strategic importance of Novatek’s…

U.S. LNG Industry Needs Prices To Double

U.S. LNG Industry Needs Prices To Double

Large U.S. LNG projects are…

Suppliers Fight For Dominance In This Crucial Gas Market

Suppliers Fight For Dominance In This Crucial Gas Market

The East Mediterranean region is…

Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Premium Content

Is European Shale Gas the Real Deal

Oilfield services major Halliburton said late last week it has completed the first hydraulic fracture (frac) on a horizontal shale gas well in Poland. The Markowola-1 well was drilled 50 miles south of Warsaw, on behalf of Polish state petroleum company PGNiG.

This is a big moment. There's been a shale land rush of late in much of Europe, with gas companies big and small picking up millions of acres of prospective land. We've heard a lot of talk about trillions of cubic feet of potential gas resources.

Wells like Markowola will answer some important questions. Like, will these huge gas resources actually flow to surface?

If the well does test at high rates, expect a lot of hoopla. Analysts will say the "nut has been cracked" on Europe's shale gas business. Production success on wells like this could even touch off a bit of a European shale gas mania in the stock markets. (Although a negative test would have the opposite effect.)

But investors need to keep a clear head assessing the coming results. A good test would be one thing. But the biggest question is well economics.

To fully assess whether European shale gas is the "real deal", we need information on well costs. Halliburton didn't mention any costs data in last week's press release. And chances are they won't in any future production announcements.

But only by assessing well cost versus productivity can we know whether wells like Markowola will make or lose money. Gas wells in Europe aren't cheap (especially when they include a horizontal leg and a frac). A test of 10 million cubic feet per day might sound exciting, but if the well cost $20 million to drill it won't make the owner a dime of profit.

There's a big difference between proving geology and proving economic viability (the latter being far more important). Keep that in mind as news on Europe's shale emerges over the coming weeks and months.

Here's to being a skeptical shale enthusiast.

By. Dave Forest of Notela Resources


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • Anonymous on August 18 2010 said:
    Good work, Dave. This shale thing isn't as clear as some people believe that it is. In thinking about my electric bill in the future, and my energy economics lectures, I would like to know exactly what to expect from shale operations, but for some reason I smell hype.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News