Check out shale gas heavy weight Chesapeake Energy's August 2010 Investor Presentation.
They want to sloooooow down drilling until gas prices reach $6/MMBTU and they are looking for more liquids.
(See page 6 of the presentation)
That puts the shale gas threat in perspective. $6/MMBTU gas sounds like a market for AK gas really does exist.
Wednesday, August 4, 2010
Concerned about Shale Gas?
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This is encouraging on a couple of fronts. First, the obvious implication that Shale Gas (SG) isn't as cheap as its proponents would like us to believe.
The second implication I see is a bit more subtle, and that's that Chesapeake is actually expecting the market to find this level (or there'd be no point in exploring now).
They're probably right, too. Conventional production is falling quickly enough that even if SG could live up to its touted potential, it still couldn't keep up. And there's plenty of reason to believe that the gas demand is going to strengthen (barring massive market fluctuations).
So, yes, good news. Nice catch.
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