Is Shale Gas Economic?
http://www.worldoil.com/Magazine/MAGAZINE_DETAIL.asp?ART_ID=3762&am...
Editor Berman questions the economics of Shale Gas plays under current economic conditions and how the Shale Plays were far riskier than once believed...a mirror image to the financial collapse of housing.
Shale plays not only satisfied this model, but they also solved the perennial E&P problem of being opportunity-constrained. Because shale is almost ubiquitous, there are no limits to what can be spent pursuing new and existing opportunities. This shift was widely supported by the capital investment community because of the low perceived risk, and the fact that non-scientists and conventional thinkers could understand the play.
While these plays are an important component of domestic gas production, even among unconventional gas supplies, tight gas and coalbed methane dominate current production.
These plays involve considerable risk. The fact that 75% of wells are commercial failures at current gas prices is a tangible risk. Great emphasis is placed on engineering ideas and technology, but concern for geological and geophysical controls is uneven among shale players. All shale plays are different and require a thorough understanding of thermal maturity, structural geology, rock fracturability, silty or sandy beds within the shale package, and sweet spots.
Editor Berman questions the economics of Shale Gas plays under current economic conditions and how the Shale Plays were far riskier than once believed...a mirror image to the financial collapse of housing.
Shale plays not only satisfied this model, but they also solved the perennial E&P problem of being opportunity-constrained. Because shale is almost ubiquitous, there are no limits to what can be spent pursuing new and existing opportunities. This shift was widely supported by the capital investment community because of the low perceived risk, and the fact that non-scientists and conventional thinkers could understand the play.
While these plays are an important component of domestic gas production, even among unconventional gas supplies, tight gas and coalbed methane dominate current production.
These plays involve considerable risk. The fact that 75% of wells are commercial failures at current gas prices is a tangible risk. Great emphasis is placed on engineering ideas and technology, but concern for geological and geophysical controls is uneven among shale players. All shale plays are different and require a thorough understanding of thermal maturity, structural geology, rock fracturability, silty or sandy beds within the shale package, and sweet spots.
Tags: economics
Views: 128
Replies to This Discussion
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landownerPermalink Reply by Bobi Carr ("parker") on -
Jay,
You would have to read some of Mr. Oliver's past post. They are all WAY OUT THERE.
This is from his home page:
I have been in the Oil and Gas industry for over fifty years as an oil company owner and operator and as a landman. I am also a geologist.
OBVIOUSLY, HE IS A DIFFERENT SORT OF GEOLOGIST.
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landownerPermalink Reply by Checkmateking on -
Robert G. Oliver is a dithering fool. That is all.
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