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Permalink Reply by Skip Peel - Mineral Consultant on June 3, 2014 at 6:27

MAYBE BHP BILLITON'S $20B FRACKING BET WASN'T A BLUNDER AFTER ALL

Forbes.com  6/03/2014

Excerpt:

"Shale operations have ramped up to account for 40% of BHP Billiton Petroleum’s 670,000 barrels per day of oil (and equivalent gas) production. The focus of their efforts is clearly the Eagle Ford shale, where Skaufel says their position is “the best of the best.” Of 25 total rigs in operation, he has 17 of them in the Eagle Ford. The next most exciting area is the Permian basin, which has seen a riot of new activity in the past two years, and where BHP has 450,000 acres. Even the gassy Haynesville shale of Louisiana is “economically robust” now; with the trebling of gas prices in two years BHP is generating 35% returns on invested capital there."

Link to complete article: 

http://www.forbes.com/sites/christopherhelman/2014/06/03/maybe-bhp-...

Permalink Reply by jim weyland on June 3, 2014 at 6:52

skip,

i learned more about good shale well completion practices from your forbes article than the sum of what i though that i knew before.

an outstanding post.

jim

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Permalink Reply by Skip Peel - Mineral Consultant on June 3, 2014 at 6:56

Glad you did, jim.  I just liked the ring of the term, "economically robust".  I'd like to see ROR =/> 50% as the Haynesville would then be much more competitive with other plays. for drilling dollars.  The BHP comments on lower drill cost and improved completion designs is encouraging.

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Permalink Reply by jim weyland on June 3, 2014 at 7:49

 i was surprised at just how little the ng contract strip moved after yesterday's epa edict.

on a related note, aep, the electric utility which, imo, has the most to loose under the proposal, is w/in $1.00 of its five year high.

markets are funny things.

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Permalink Reply by jim weyland on June 12, 2014 at 7:38

i'm guessing the market didn't like this week's storage build number, 107 Bcf. all remaining '14 contracts are up at least $0.20 per MMBtu, July is up over $0.25 per MMBtu.

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