• 3 minutes Could Venezuela become a net oil importer?
  • 7 minutes Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 12 minutes Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 3 hours Could Venezuela become a net oil importer?
  • 9 hours Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 6 hours Tesla Closing a Dozen Solar Facilities in Nine States
  • 12 hours Saudi Arabia plans to physically cut off Qatar by moat, nuclear waste and military base
  • 6 hours Why is permian oil "locked in" when refineries abound?
  • 3 hours Gazprom Exports to EU Hit Record
  • 3 hours Could oil demand collapse rapidly? Yup, sure could.
  • 4 hours EU Leaders Set To Prolong Russia Sanctions Again
  • 3 hours Oil Buyers Club
  • 5 hours Oil prices going down
  • 1 day Teapots Cut U.S. Oil Shipments
  • 42 mins Saudi Arabia turns to solar
  • 20 hours Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 6 hours EVs Could Help Coal Demand
  • 12 hours China’s Plastic Waste Ban Will Leave 111 Million Tons of Trash With Nowhere To Go
  • 1 day Hot line, Macron: Phone Calls With Trump Are Like Sausages Best Not To Know What Is Inside
Alt Text

Russia Pushes Ahead With Controversial Nord Stream 2

Russia’s controversial Nord Stream 2…

Alt Text

What Will Follow The Age Of Oil?

Natural gas production is exploding…

Alt Text

Azerbaijan’s Pipeline Conundrum

Azerbaijan’s European pipeline project is…

Dave Forest

Dave Forest

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

More Info

Trending Discussions

Liquid Gold

There's a growing divide in the North America gas industry.

Liquids or non.

The always hawkish energy eye of Colorado's Bentek Energy recently observed the growing effect of liquids-rich plays on the U.S. gas production profile.

Speaking at a National Energy Services Association forum last week, Bentek managing director Rusty Braziel noted just how critical liquid-rich gas plays are becoming. Said Braziel, "Some companies could sell their liquids and give the gas away for free and still make money."

This is an important point for anyone investing in natural gas. High-value liquids from plays like the Eagle Ford shale in Texas make producers in these areas somewhat insulated from gas prices. Even at low prices, producers can keep running these wells at a profit.

This flies in the face of conventional wisdom. Which suggests that "low prices should cure low prices" by forcing producers to shut in wells, ultimately decreasing output and raising bidding for the remaining supply.

Braziel illustrates this effect with some economics from different U.S. plays.

In the dry-gas Haynesville shale, wells yield a 25% rate of return at a $4/mcf gas price.

Compare this to the Eagle Ford shale. In moderately liquids-bearing sections of this play, rates of return at $4/mcf run 50%.

Here's an even more staggering data point. In the most liquids-rich parts of the Eagle Ford, return rates at $4 gas can be as high as 200%.

The bottom line is that the average Eagle Ford producer can make money at a Bentek-estimated gas price of $2.04/mcf.

Meaning we're far from curbing production at $4/mcf gas. At least for the right plays.

By. Dave Forest of Notela Resources




Back to homepage

Trending Discussions


Leave a comment
  • Anonymous on October 16 2010 said:
    Sounds too good to be true, Dave. In fact it sounds so good that I'm tempted to scratch my head and ask a few questions. There are a couple of conferences in Stockholm in a few weeks, and in both of them the expression 'game changer' is prominent. Naturally, I'm going to be present in the very first row, and I hope that those ladies and gentlemen don't make any mistakes.

Leave a comment




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