Oil and Gas Lawyer Blog

Chesapeake Energy Corporation summarized its activities in the country's "Big 6" shale plays in its Operational Update issued on February 16. The report reveals the huge impact Chesapeake has had on shale plays from New York to South Texas.

Chesapeake is the eighth largest E&P company ranked by total assets according to the Oil & Gas Financial Journal, behind ExxonMobil, Chevron, ConocoPhillips, Anadarko, Marathon, Occidental and XTO Energy. It also ranks eighth in exploratory spending and market capitalization, and twelfth in total revenue. (Chesapeake's market cap is 18% of ExxonMobil's.) In 2009, Chesapeake drilled 1,148 gross operated wells, which it called "the industry's most active drilling program," spending $2.941 billion. Its leashold inventory at the end of 2009 was 13.7 million net acres.

Here are some highlights from Chesapeake's report:

Continue reading "Chesapeake Shale Plays" »

The Energy Information Administration has revised its forecast for 2009 U.S. industrial natural gas demand, to decline by 7.4% this year. It predicts total natural gas consumption to fall 1.8% in 2009. U.S. natural gas production is expected to decline 0.3% in 2009, and to slip 1% in 2010. EIA predicts natural gas Henry Hub prices to average $4.24/mcf in 2009 and $5.83/mcf in 2010, compared with $9.13/mcf in 2008.

Chesapeake Energy has elected to further curtail its gas production, by a total of 400 mmcf in 2009, representing approximately 13% of Chesapeake's production capacity.

One petroleum geologist and industry consultant, Arthur Berman, believes that the Haynesville Shale in Lousiana, touted as the hottest onshore gas play in North America, is overrated. His analysis of early discoveries shows that the wells decline rapidly, cost about $7.5 million per well to drill and complete, and would require a price of $8/mcf to break even.  http://petroleumtruthreport.blogspot.com