• 9 hours Thanksgiving Gas Prices At 3-Year High
  • 13 hours Iraq’s Giant Majnoon Oilfield Attracts Attention Of Supermajors
  • 15 hours South Iraq Oil Exports Close To Record High To Offset Kirkuk Drop
  • 19 hours Iraqi Forces Find Mass Graves In Oil Wells Near Kirkuk
  • 19 hours Chevron Joint Venture Signs $1.7B Oil, Gas Deal In Nigeria
  • 20 hours Iraq Steps In To Offset Falling Venezuela Oil Production
  • 22 hours ConocoPhillips Sets Price Ceiling For New Projects
  • 3 days Shell Oil Trading Head Steps Down After 29 Years
  • 4 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 4 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 4 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 4 days Venezuela Officially In Default
  • 4 days Iran Prepares To Export LNG To Boost Trade Relations
  • 4 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 4 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 4 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 5 days Rosneft Announces Completion Of World’s Longest Well
  • 5 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 5 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 5 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 5 days Santos Admits It Rejected $7.2B Takeover Bid
  • 5 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 5 days Africa’s Richest Woman Fired From Sonangol
  • 6 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 6 days Russian Hackers Target British Energy Industry
  • 6 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
  • 6 days DOJ: Protestors Interfering With Pipeline Construction Will Be Prosecuted
  • 6 days Lower Oil Prices Benefit European Refiners
  • 6 days World’s Biggest Private Equity Firm Raises $1 Billion To Invest In Oil
  • 7 days Oil Prices Tank After API Reports Strong Build In Crude Inventories
  • 7 days Iraq Oil Revenue Not Enough For Sustainable Development
  • 7 days Sudan In Talks With Foreign Oil Firms To Boost Crude Production
  • 7 days Shell: Four Oil Platforms Shut In Gulf Of Mexico After Fire
  • 7 days OPEC To Recruit New Members To Fight Market Imbalance
  • 7 days Green Groups Want Norway’s Arctic Oil Drilling Licenses Canceled
  • 7 days Venezuelan Oil Output Drops To Lowest In 28 Years
  • 7 days Shale Production Rises By 80,000 BPD In Latest EIA Forecasts
  • 8 days GE Considers Selling Baker Hughes Assets
  • 8 days Eni To Address Barents Sea Regulatory Breaches By Dec 11
  • 8 days Saudi Aramco To Invest $300 Billion In Upstream Projects

Breaking News:

Thanksgiving Gas Prices At 3-Year High

Liquid Gold

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


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