Shale Market in North America to 2016 - Motivated by Surplus Gas Production, Global Energy Players Eyeing Lucrative Asian Markets for Export by GBIResearch

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									Shale Market in North America to 2016
Motivated by Surplus Gas Production, Global Energy Players Eyeing Lucrative
Asian Markets for Export
GBI Research Report Guidance




                                              GBI Research Report Guidance
                                              ·     Chapter two provides an introduction to the report, along with chapter-by-chapter report guidance.
                                              ·     Chapter three gives an overview of shale gas plays in the US and the process involved in shale gas
                                                    development.
                                              ·     Chapter four provides an operational overview of the Bakken Shale, detailing key characteristics,
                                                    production trends to 2016, and cost trends, which includes well cost and finding and development
                                                    cost, drilling activity, and planned rigs. This chapter also contains Bakken Shale’s competitive analysis,
                                                    analyzing major companies by both acreage and production, and planned capital expenditure for 2012
                                                    by major companies. It also details the major merger and acquisition activities in the Bakken shale.
                                              ·     Chapter five provides an operational overview of the Barnett Shale, detailing key characteristics,
                                                    production trends to 2016, and cost trends, which includes well cost and finding and development
                                                    cost, drilling activity, and planned rigs. This chapter also contains Barnett Shale’s competitive analysis,
                                                    analyzing major companies by both acreage and production, and planned capital expenditure for 2012
                                                    by major companies. It also details the major merger and acquisition activities in the Barnett Shale.
                                              ·     Chapter six provides an operational overview of the Eagle Ford Shale, detailing key characteristics,
                                                    production trends to 2016, and cost trends, which includes well cost and finding and development
                                                    cost, drilling activity, and planned rigs. This chapter also contains Eagle Ford Shale’s competitive
                                                    analysis, analyzing major companies by both acreage and production, and planned capital expenditure
                                                    for 2012 by major companies. It also details the major merger and acquisition activities in the Eagle
                                                    Ford Shale.
                                              ·     Chapter seven provides an operational overview of the Fayetteville Shale, detailing key characteristics,
                                                    production trends to 2016, and cost trends, which includes well cost and finding and development
                                                    cost, drilling activity, and planned rigs. This chapter also contains Fayetteville Shale’s competitive
                                                    analysis, analyzing major companies by both acreage and production, and planned capital expenditure
                                                    for 2012 by major companies. It also details the major merger and acquisition activities in the
                                                    Fayetteville Shale.
                                              ·     Chapter eight provides an operational overview of the Haynesville/Bossier Shale, detailing key
                                                    characteristics, production trends to 2016, and cost trends, which includes well cost and finding and
                                                    development cost, drilling activity, and planned rigs. This chapter also contains Haynesville/Bossier
                                                    Shale’s competitive analysis, analyzing major companies by both acreage and production, and planned
                                                    capital expenditure for 2012 by major companies. It also details the major merger and acquisition
                                                    activities in the Haynesville/Bossier Shale.
                                              ·     Chapter nine provides an operational overview of the Marcellus Shale, detailing key characteristics,
                                                    production trends to 2016, and cost trends, which includes well cost and finding and development
                                                    cost, drilling activity, and planned rigs. This chapter also contains Marcellus Shale’s competitive
                                                    analysis, analyzing major companies by both acreage and production, and planned capital expenditure
                                                    for 2012 by major companies. It also details the major merger and acquisition activities in the
                                                    Marcellus Shale.
                                              ·     Chapter 10 provides an operational overview of the Woodford Shale, detailing key characteristics,
                                                    production trends to 2016, and cost trends, which includes well cost and finding and development
                                                    cost, drilling activity, and planned rigs. This chapter also contains Woodford Shale’s competitive
                                                    analysis, analyzing major companies by both acreage and production, and planned capital expenditure
                                                    for 2012 by major companies. It also details the major merger and acquisition activities in the
                                                    Woodford Shale.
                                              ·     Chapter 11 is the Appendix, providing the research methodology of GBI Research, glossary and contact
                                                    information




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                                                                                                                                                        Page 2
Executive Summary




                                              Executive Summary
                                              Large Shale Development Has Redefined the North American Natural Gas Market
                                              The North American shale gas sector has progressed substantially, due to the development of the first shale
      Production from the                     play: the Barnett Shale. Technological advancements, coupled with the emergence of global energy players
      Marcellus shale play reached            in shale development, have led to increased drilling activities in shale plays across the region, especially in
      167.4 million barrels of oil            the lower 48 states of the US. According to the US Energy Information Administration (EIA), proven and
      equivalent (MMboe) in 2011,             unproven shale reserves in the US accounted for almost 25% (2,214 trillion cubic feet [tcf]) of total
      double the 2010 total of 83.6           technically recoverable natural gas reserves in the country, from January 1, 2010 (EIA, 2011). It is estimated
      MMboe                                   by geologists that Marcellus shale, the most expansive shale reserve in the US, contains between 168 and
                                              516tcf of natural gas (DEC, New York, 2012). Shale plays such as Eagle Ford, Marcellus, Haynesville,
                                              Fayetteville and Woodford recorded exponential production growth in 2011, due to increased drilling
                                              activity. Production from the Marcellus shale play reached 167.4 million barrels of oil equivalent (MMboe)
                                              in 2011, double the 2010 total of 83.6 MMboe. Similarly, production from the Haynesville shale play
                                              increased from 264.4 MMboe to 394.6 MMboe in 2011. Eagle Ford shale production recorded an increase
                                              of 34% between 2010 and 2011, to reach 28.4 MMboe in 2011.
                                              Below figure shows the oil and gas production from major shale plays in the US in 2011 and the percentage
                                              change in production during 2010 and 2011.

                                                Shale Plays, The US, Oil and Gas Production (MMboe), 2011, and Increase (%), 2010–2011 by Shale
                                                Type

                                                                       450                                                                                                                                       120

                                                                       400
                                                                                                                                                                                                                 100
                                                                       350




                                                                                                                                                                                                                       % Change from 2010
                                                                       300                                                                                                                                       80
                                                   Production, MMboe




                                                                       250
                                                                                                                                                                                                                 60
                                                                       200

                                                                       150                                                                                                                                       40

                                                                       100
                                                                                                                                                                                                                 20
                                                                       50

                                                                         0                                                                                                                                       0
                                                                                                               Fayetteville Shale




                                                                                                                                    Eagle Ford Shale




                                                                                                                                                                               Shale/Bossier
                                                                             Barnett Shale




                                                                                             Bakken Shale




                                                                                                                                                                                               Marcellus Shale
                                                                                                                                                       WoodFord Shale




                                                                                                                                                                                Haynesville

                                                                                                                                                                                  Shale




                                                                                                            Shale Plays                                                 % Change

                                                Source: GBI Research, Oil and Gas Upstream Unconventional Database (Accessed on June 13, 2012)




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                                                                                                                                                                                                           Page 3
Executive Summary




                                              Currently, the Haynesville and Marcellus shales are most notable in terms of potential. The North American
                                              region contributed almost 89% of total global unconventional gas production in 2010. The future production
                                              trend from these shale plays is expected to be very strong. According to the estimates of the EIA, the
                                              contribution of shale gas towards total US natural gas production would increase from 23% in 2010 to 49%
                                              in 2035. Domestic consumers, especially power and other allied industries, are experiencing an abundant
                                              supply of gas at a substantially low price. The region now has a potential supply of Liquefied Natural Gas
                                              (LNG) to export to lucrative Asian markets, where natural gas is still traded at a price three times higher
                                              than the domestic price (EIA AEO, June 2012).

       The total annual capex for             Below figure illustrates natural gas production in the US between 1990 and 2035.
       shale development in the US
       is expected to reach                     Natural Gas Production, The US (tcf), 1990–2035
       approximately $35.3 billion
                                                                       30
       in 2012


                                                                       25



                                                                       20
                                                     Production, tcf




                                                                       15



                                                                       10



                                                                        5



                                                                        0
                                                                                                                2000




                                                                                                                                                                         2016




                                                                                                                                                                                                                   2028
                                                                            1990

                                                                                   1992

                                                                                           1994

                                                                                                  1996

                                                                                                         1998



                                                                                                                       2002

                                                                                                                              2004

                                                                                                                                     2006

                                                                                                                                            2008

                                                                                                                                                   2010

                                                                                                                                                          2012

                                                                                                                                                                 2014



                                                                                                                                                                                2018

                                                                                                                                                                                       2020

                                                                                                                                                                                              2022

                                                                                                                                                                                                     2024

                                                                                                                                                                                                            2026



                                                                                                                                                                                                                          2030

                                                                                                                                                                                                                                 2032

                                                                                                                                                                                                                                        2034
                                                                                          Non-associated onshore               Associated with oil                      Coalbed methane                        Alaska
                                                                                          Non-associated offshore              Tight gas                                Shale gas

                                                Source: GBI Research, Oil and Gas; Energy Information Administration Annual Energy Outlook(June 2012)




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                                                                                                                                                                                                                           Page 4
Executive Summary




                                              Increasing Investments in Shale Plays from Major Companies
                                              The development of shale gas over recent years has significantly altered the US energy outlook. The surplus
                                              supply of gas from these shale plays has provided the US with energy security; this has opened up new
                                              opportunities for the export of natural gas to lucrative markets in the Asia-Pacific region, where gas prices
                                              are higher. Major companies are showing interest in this opportunity, and have significantly increased their
                                              capital expenditure for 2012 for the development of shale plays. For instance, ConocoPhillips and
                                              Chesapeake Energy have announced respective capex of $2.3 billion and $2.4 billion for the development of
                                              the Eagle Ford shale play in 2012. Other players, such as major Bakken shale operators Continental
                                              Resources and Hess Corporation, have announced respective capex of $1.1 billion and $1.9 billion in 2012.
                                              The total annual capex for shale development in the US is expected to reach approximately $35.3 billion in
                                              2012. The strong growth rate in capex will continue in the near future, and is expected to reach around
                                              $52.1 billion by 2016, at an Average Annual Growth Rate (AAGR) of 11.9% between 2012 and 2016.
                                              Below figure shows the estimated total capital expenditure for shale plays in the US between 2012 and
                                              2016.

                                                Shale Plays, The US, Total Capital Expenditure ($bn), 2012–2016

                                                                   60




                                                                   50




                                                                   40
                                                      capex, $bn




                                                                   30




                                                                   20




                                                                   10




                                                                    0
                                                                        2012               2013                  2014                  2015              2016


                                                Source: GBI Research, Oil and Gas Upstream Unconventional Database (Accessed on 13 June 2012)




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                                                                                                                                                                     Page 5
Executive Summary




                                              Global Energy Players Continue to Strengthen their Presence in Shale Plays through Mergers, Acquisitions
                                              and Partnerships
                                              Large independent global energy players are consolidating their presence in shale development through
                                              partnering and acquisition of domestic companies experienced in operating shale plays. These
                                              developments demonstrate the increasing prominence of shale plays in terms of contribution to the global
                                              energy share, particularly in the North American region. Some major Mergers and Acquisitions (M&A)
                                              activities include the following:
                                              ·     On February 18, 2011, Chevron Corporation completed the acquisition of Atlas Energy, a major shale
                                                    gas player with prominent acreage in southwestern Pennsylvania’s Marcellus shale, for $3 billion. The
                                                    acquisition will enable Chevron to further develop the high potential Marcellus shale asset base.
                                              ·     On July 15, 2011, BHP Billiton and Petrohawk Energy Corporation entered into an agreement which
                                                    would provide the former with the right to further develop Eagle Ford, Haynesville shale and Permian
                                                    Basin.
                                              ·     On October 12, 2010, China National Offshore Oil Corporation (CNOOC) announced that it would invest
                                                    $1.08 billion in Chesapeake Energy Corporation, in exchange for a 33% stake in the Eagle Ford acreage
                                                    held by the latter, as well as inviesting a further $1.08 billion for drilling and development costs
                                                    associated with Eagle Ford shale.
                                              ·     On May 28, 2010, Europe’s largest energy producer, Royal Dutch Shell, announced an agreement to
                                                    acquire East Resources for $4.7 billion, which will further enhance Shell’s unconventional gas reserves
                                                    through Marcellus and Eagle Ford plays.
                                              ·     Another global energy major, Exxon Mobil, acquired XTO Energy for $41 billion, which was announced
                                                    on December 14, 2009. XTO’s resource base, which includes abundant natural gas reserves, enabled
                                                    Exxon Mobil to become the leading natural gas producer in the US.
                                              ·     In a major deal between Chesapeake Energy Corporation and BP America, the latter agreed to buy
                                                    90,000 acres of Chesapeake’s shale gas assets in the Woodford shale play, for around $1.75 billion. BP
                                                    also announced a joint venture to acquire a 50% stake in Lewis Energy Group’s 80,000 acres in the
                                                    Eagle Ford play, in order to further expand its operations.
                                              Shale plays in North America have continued to attract multinational energy companies, with M&A activities
                                              increasing substantially in 2011. More than 170 deals valued at greater than $50m were made. The entry of
                                              global players such as Exxon Mobil Corporation, Royal Dutch Shell, CNOOC and Chevron Corporation reflects
                                              the prominence that shale has gained over the past two years.
                                              Shale Gas Companies Turn to Lucrative Asian Markets for Export of Gas, while Domestic Critics Hinder the
                                              Move
                                              Abundant supplies of natural gas coupled with an uncertain economy are the primary reasons behind low
                                              natural gas prices in North America. Natural gas prices in the region have not recovered since the economic
                                              recession in 2008. The past few years have seen prices falling to around $3 to $4 per million British Thermal
                                              Units (MMBtu), and the EIA expects the annual wellhead natural gas price trend to remain at around $5 per
                                              MMBtu until 2025. Meanwhile, the abundance of the supply of shale gas is creating a demand/supply
                                              imbalance, which is further impacting the price of natural gas. According to the EIA, the US domestic natural
                                              gas demand is only expected to increase by 1% per year between 2009 and 2035, mostly driven by gas-
                                              powered industrial power plants and commercial buildings (EIA AEO, 2012). In contrast, there is a faster
                                              rising demand for gas in developing economies such as China, India and southeast Asian countries.
                                              Many companies are now actively involved in shale gas production, attracted by lucrative export markets
                                              where natural gas prices are three times higher. For example, Imperial Oil is planning the construction of an
                                              LNG plant on Canada’s west coast, in order to tap into the Asian market for shale gas. However, in the US,
                                              the Obama administration faces a dilemma in terms of allowing exports, since a rise in domestic prices
                                              could have a negative impact on the presidential election. Currently, only one terminal, Cheniere Energy,
                                              has been given approval. Permits for the construction of eight LNG plants are currently awaiting approval.
                                              Although the low natural gas prices suit domestic consumers, they are not helpful for operators. Gas
                                              companies are eagerly waiting a decision to be made in their favor, as access to foreign markets would
                                              further develop the shale industry.




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                                                                                                                                                      Page 6
Executive Summary




                                              Environmental Issues Associated with Hydraulic Fracturing Impacting Shale Production
                                              Technological improvements such as hydraulic fracturing resulted in significant production of shale gas over
       According to the US                    the past few years. However, there is a downside to this. Water is one of the primary components involved
       Environmental Protection               in hydraulic fracturing. Billions of gallons of highly pressurized water are being pumped through wells
       Agency (EPA), approximately            thousands of feet below the ground, to create fractures in shale rocks and enable the gas to flow up the
       1.2 to 3.5 million gallons of          well. According to the US Environmental Protection Agency (EPA), approximately 1.2 to 3.5 million gallons
       water is required for the              of water is required for the fracturing of a typical well. For instance, 1.7% of the total freshwater demand
       fracturing of a typical wellv          (554 billion gallons) in areas near Barnett shale is used for the production of gas, and this percentage share
                                              will increase substantially in future with the increased drilling of these shales. Marcellus shale and
                                              Haynesville shale require approximately 3.8 billion and 2.7 billion gallons of water respectively for their
                                              production, according to the EPA (US EPA, 2011).
                                              Water is affected by the entire process of fracturing. For example, as a result of decreasing groundwater
                                              levels, used water that flows out of the well after fracturing is being treated, and spillages of chemicals such
                                              as fracturing fluid have been found in the water in nearby areas. Recent EPA regulations under the Toxic
                                              Substances Control Act (TSCA) require every company involved in the fracturing process to submit the
                                              chemical properties of the fracturing fluid and details of airborne emissions from wells. In addition to these
                                              regulations, state regulations are also imposing tough laws for the protection of the environment. For
                                              instance, in February 2012, Pennsylvania’s state governor introduced a law forcing operators to pay a local
                                              impact fee ranging from $40,000 to $60,000 for drilling activities in each well, over a period of 15 years. This
                                              would increase the operator’s cost of production. Moreover, the approval of new wells was put on hold in
                                              the state of Ohio following issues related to wastewater disposal. Although other fracturing technologies
                                              such as gas fracking are available, hydraulic fracturing is more economical. On the whole though, anti-
                                              fracking sentiments are spreading across the states in the US, and technological advancements in the future
                                              should bring about better recycling processes and less water demand for fracturing.




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                                                                                                                                                       Page 7
Table of Contents




                                              1         Table of Contents
                                              1   Table of Contents ........................................................................................................................................ 8
                                                  1.1      List of Tables .................................................................................................................................. 11
                                                  1.2      List of Figures................................................................................................................................. 13
                                              2   Introduction .............................................................................................................................................. 14
                                              3   North America Shale Plays, Overview ....................................................................................................... 15
                                                  3.1      Shale Plays, North America ........................................................................................................... 15
                                                  3.2      Shale Gas Development................................................................................................................. 16
                                              4   Bakken Shale ............................................................................................................................................. 17
                                                  4.1      Bakken Shale, Background ............................................................................................................ 17
                                                      4.1.1      Bakken Shale, Key Characteristics, 2011 ............................................................................... 19
                                                  4.2      Bakken Shale, Operational Overview ............................................................................................ 20
                                                      4.2.1      Bakken Shale, Initial Production Rates .................................................................................. 20
                                                  4.3      Bakken Shale, Production Trends .................................................................................................. 21
                                                      4.3.1      Bakken Shale, Historic and Forecast Production, 2006–2016................................................ 21
                                                  4.4      Bakken Shale, Cost Trends............................................................................................................. 22
                                                      4.4.1      Well Cost ............................................................................................................................... 22
                                                      4.4.2      Finding and Development Cost.............................................................................................. 24
                                                  4.5      Bakken Shale, Drilling Activity ....................................................................................................... 25
                                                      4.5.1      Bakken Shale, Drilling Activity, North Dakota, 2012 ............................................................. 25
                                                      4.5.2      Bakken Shale, Montana Drilling Activity ............................................................................... 26
                                                  4.6      Bakken Shale, Planned Rigs, 2012 ................................................................................................. 27
                                                  4.7      Bakken Shale, Competitive Landscape .......................................................................................... 28
                                                      4.7.1      Bakken Shale, Major Companies by Acreage ........................................................................ 28
                                                      4.7.2      Bakken Shale, Major Companies by Production .................................................................... 30
                                                      4.7.3      Bakken Shale, Planned Capital Expenditure by Companies, 2012 ......................................... 31
                                                  4.8      Bakken Shale, Merger and Acquisition Activities .......................................................................... 32
                                              5   Barnett Shale ............................................................................................................................................. 41
                                                  5.1      Barnett Shale, Background ............................................................................................................ 41
                                                      5.1.1      Barnett Shale, Key Characteristics ......................................................................................... 42
                                                  5.2      Barnett Shale, Operational Overview ............................................................................................ 43
                                                      5.2.1      Barnett Shale, Initial Production Rates.................................................................................. 43
                                                  5.3      Barnett Shale, Production Trends, 2000–2016 .............................................................................. 44
                                                      5.3.1      Barnett Shale, Historic and Forecast Production Trends, 2000–2016 ................................... 44
                                                      5.3.2      Barnett Shale Gross Production as a Share of Texas’ Total Gross Gas Production ................ 46
                                                      5.3.3      Barnett Shale, Gross Gas Production by County, 2011 .......................................................... 47
                                                  5.4      Barnett Shale, Cost Trends ............................................................................................................ 49
                                                      5.4.1      Well Cost ............................................................................................................................... 49
                                                      5.4.2      Finding and Development Cost.............................................................................................. 49
                                                  5.5      Barnett Shale, Drilling Activity ....................................................................................................... 50
                                                      5.5.1      Barnett Shale, Drilling Permits Issued ................................................................................... 50
                                                  5.6      Barnett Shale, Planned Rigs, 2012 ................................................................................................. 52
                                                  5.7      Barnett Shale, Competitive Landscape .......................................................................................... 53
                                                      5.7.1      Barnett Shale, Major Companies by Acreage ........................................................................ 53
                                                      5.7.2      Barnett Shale, Major Companies by Production.................................................................... 54
                                                      5.7.3      Barnett Shale, Planned Capital Expenditure by Companies, 2012......................................... 55
                                                  5.8      Barnett Shale, Merger and Acquisition Activities .......................................................................... 55
                                              6   Eagle Ford Shale ........................................................................................................................................ 59
                                                  6.1      Eagle Ford Shale, Background ....................................................................................................... 59
                                                      6.1.1      Eagle Ford Shale, Key Characteristics, 2011 .......................................................................... 60
                                                  6.2      Eagle Ford Shale, Operational Overview ....................................................................................... 61


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                                                                                                                                                                                          Page 8
Table of Contents




                                                    6.2.1     Eagle Ford Shale, Initial Production Rates ............................................................................. 61
                                                  6.3    Eagle Ford Shale, Production Trends ............................................................................................. 62
                                                    6.3.1     Eagle Ford Shale, Historic and Forecast Production, 2000–2016 .......................................... 65
                                                6.4      Eagle Ford Shale, Drilling Activity .................................................................................................. 67
                                                6.5      Eagle Ford Shale, Cost Trends, 2011.............................................................................................. 69
                                                    6.5.1     Well Cost ............................................................................................................................... 69
                                                    6.5.2     Finding and Development Cost.............................................................................................. 70
                                                6.6      Eagle Ford Shale, Planned Rigs, 2012 ............................................................................................ 70
                                                6.7      Eagle Ford Shale, Competitive Landscape ..................................................................................... 71
                                                    6.7.1     Eagle Ford Shale, Major Companies by Net Acreage............................................................. 71
                                                    6.7.2     Eagle Ford Shale, Major Companies by Production, 2011 ..................................................... 73
                                                6.8      Eagle Ford Shale, Planned Capital Expenditure by Companies, 2012 ............................................ 75
                                                6.9      Eagle Ford Shale, Merger and Acquisition Activities ..................................................................... 76
                                              7 Fayetteville Shale ...................................................................................................................................... 81
                                                7.1      Fayetteville Shale, Background...................................................................................................... 81
                                                    7.1.1     Fayetteville Shale, Key Characteristics, 2011......................................................................... 82
                                                7.2      Fayetteville Shale, Operational Overview ..................................................................................... 82
                                                    7.2.1     Fayetteville Shale, Initial Production Rates ........................................................................... 82
                                                7.3      Fayetteville Shale, Production Trends ........................................................................................... 83
                                                    7.3.1     Fayetteville Shale, Historic and Forecast Production, 2006–2016 ......................................... 83
                                                7.4      Fayetteville Shale, Cost Trends ...................................................................................................... 85
                                                    7.4.1     Well Cost ............................................................................................................................... 85
                                                    7.4.2     Finding and Development Cost.............................................................................................. 85
                                                7.5      Fayetteville Shale, Drilling Activity ................................................................................................ 86
                                                7.6      Fayetteville Shale, Planned Rigs, 2012 .......................................................................................... 87
                                                7.7      Fayetteville Shale, Competitive Landscape ................................................................................... 88
                                                    7.7.1     Fayetteville Shale, Major Companies by Acreage.................................................................. 88
                                                    7.7.2     Fayetteville Shale, Major Companies by Production ............................................................. 89
                                                7.8      Fayetteville Shale, Planned Capital Expenditure by Companies, 2012 .......................................... 89
                                                7.9      Fayetteville Shale, Merger and Acquisition Activities.................................................................... 90
                                              8 Haynesville/Bossier Shale ......................................................................................................................... 92
                                                8.1      Haynesville/Bossier Shale, Background ......................................................................................... 92
                                                    8.1.1     Haynesville Shale, Key Characteristics, 2011 ......................................................................... 93
                                                8.2      Haynesville/Bossier Shale, Operational Overview ......................................................................... 94
                                                    8.2.1     Haynesville Shale, Initial Production Rate ............................................................................. 94
                                                8.3      Haynesville Shale, Production Trends ........................................................................................... 95
                                                    8.3.1     Haynesville Shale, Historic and Forecast Production, 2000–2016 ......................................... 95
                                                8.4      Haynesville Shale, Cost Trends ...................................................................................................... 97
                                                    8.4.1     Well Cost ............................................................................................................................... 97
                                                    8.4.2     Finding and Development Costs ............................................................................................ 97
                                                8.5      Haynesville Shale, Drilling Activity ................................................................................................. 98
                                                    8.5.1     Haynesville Shale, Drilling Activity, Louisiana........................................................................ 98
                                                    8.5.2     Haynesville Shale, Drilling Activity, East Texas .................................................................... 100
                                                8.6      Haynesville Shale, Planned Rigs, 2012 ......................................................................................... 100
                                                8.7      Haynesville/Bossier Shale, Competitive Landscape..................................................................... 101
                                                    8.7.1     Haynesville Shale, Major Companies by Acreage ................................................................ 101
                                                    8.7.2     Haynesville Shale, Major Companies by Production............................................................ 103
                                                8.8      Haynesville Shale, Planned Capital Expenditure by Companies, 2012 ........................................ 104
                                                8.9      Haynesville Shale, Merger and Acquisition Activities .................................................................. 104
                                              9 Marcellus Shale ....................................................................................................................................... 109
                                                9.1      Marcellus Shale, Background ...................................................................................................... 109
                                                9.2      Marcellus Shale, Key Characteristics, 2011 ................................................................................. 110


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                                                                                                                                                                                        Page 9
Table of Contents




                                                  9.3     Marcellus Shale, Operational Overview ...................................................................................... 111
                                                     9.3.1    Marcellus Shale, Initial Production Rates ............................................................................ 111
                                                 9.4      Marcellus Shale, Production Trends ............................................................................................ 112
                                                     9.4.1    Marcellus Shale, Historic and Forecast Production, 2006–2016.......................................... 112
                                                 9.5      Marcellus Shale, Cost Trends....................................................................................................... 113
                                                     9.5.1    Well Cost ............................................................................................................................. 113
                                                     9.5.2    Finding and Development Cost............................................................................................ 114
                                                 9.6      Marcellus Shale, Drilling Activity ................................................................................................. 115
                                                     9.6.1    Marcellus Shale, Drilling Activity, Pennsylvania .................................................................. 115
                                                     9.6.2    Marcellus Shale, Drilling Activity, New York ........................................................................ 117
                                                 9.7      Marcellus Shale, Planned Rigs, 2012 ........................................................................................... 118
                                                 9.8      Marcellus Shale, Competitive Landscape .................................................................................... 119
                                                     9.8.1    Marcellus Shale, Major Companies by Acreage .................................................................. 119
                                                     9.8.2    Marcellus Shale, Major Companies by Production .............................................................. 121
                                                 9.9      Marcellus Shale, Planned Capital Expenditure by Companies, 2012 ........................................... 122
                                                 9.10 Marcellus Shale, Merger and Acquisition Activities .................................................................... 123
                                              10 Woodford Shale ...................................................................................................................................... 127
                                                 10.1 Woodford Shale, Background ...................................................................................................... 127
                                                 10.2 Woodford Shale, Key Characteristics .......................................................................................... 128
                                                 10.3 Woodford Shale, Operational Overview ..................................................................................... 129
                                                     10.3.1 Woodford Shale, Initial Production Rates............................................................................ 129
                                                 10.4 Woodford Shale, Production Trends ........................................................................................... 130
                                                     10.4.1 Woodford Shale, Historic and Forecast Production Trends, 2000–2016 ............................. 130
                                                 10.5 Woodford Shale, Cost Trends ...................................................................................................... 131
                                                     10.5.1 Woodford Shale, Well Cost .................................................................................................. 131
                                                     10.5.2 Woodford Shale, Finding and Development Cost ................................................................ 131
                                                 10.6 Woodford Shale, Drilling Activity ................................................................................................ 132
                                                     10.6.1 Woodford Shale, Planned Rigs, 2012 .................................................................................. 133
                                                 10.7 Woodford Shale, Competitive Landscape ................................................................................... 134
                                                     10.7.1 Woodford Shale, Major Companies by Acreage .................................................................. 134
                                                     10.7.2 Woodford Shale, Major Companies by Production.............................................................. 136
                                                     10.7.3 Woodford Shale, Planned Capital Expenditure by Companies, 2012................................... 137
                                                 10.8 Woodford Shale, Merger and Acquisition Activities.................................................................... 137
                                              11 Appendix ................................................................................................................................................. 139
                                                 11.1 Market Definition ........................................................................................................................ 139
                                                 11.2 Abbreviations .............................................................................................................................. 139
                                                 11.3 Bibliography ................................................................................................................................ 139
                                                 11.4 Methodology ............................................................................................................................... 140
                                                     11.4.1 Coverage ............................................................................................................................. 140
                                                     11.4.2 Secondary Research ............................................................................................................ 141
                                                     11.4.3 Primary Research ................................................................................................................ 141
                                                     11.4.4 Expert Panel Validation ....................................................................................................... 141
                                                 11.5 Contact Us ................................................................................................................................... 141
                                                 11.6 Disclaimer .................................................................................................................................... 142




  © GBI Research. This is a licensed product and is not to be photocopied                                                                                      GBIGE00060MR / Published SEP 2012
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Table of Contents




                                              1.1      List of Tables
                                              Table 1:     Bakken Shale, Key Characteristics, 2011 ...................................................................................... 19
                                              Table 2:     Bakken Shale, Initial Oil and Gas Production Rates by Major Companies (boe/d and Mcfe/d),
                                                           2012* ............................................................................................................................................ 20
                                              Table 3:     Bakken Shale, Historic and Forecast Oil and Gas Production (MMboe), 2006–2016 ................... 22
                                              Table 4:     Bakken Shale, Cost Per Well by Major Companies ($m), 2012* ................................................... 23
                                              Table 5:     Bakken Shale, Finding and Development Cost by Major Companies ($m/boe), 2012* ............... 24
                                              Table 6:     Bakken Shale, North Dakota, Well Completions, 2012* ............................................................... 25
                                              Table 7:     Bakken Shale, Montana, Well Permits and Well Completions, 2006–2012* ............................... 27
                                              Table 8:     Bakken Shale, Planned Rigs by Companies, 2012* ....................................................................... 27
                                              Table 9:     Bakken Shale, Major Companies by Net Acreage (Acres), 2012 ................................................... 29
                                              Table 10:    Bakken Shale, Oil and Gas Production by Major Companies (MMboe), 2011 .............................. 31
                                              Table 11:    Bakken Shale, Planned Capital Expenditure by Companies ($m), 2012 ....................................... 31
                                              Table 12:    Bakken Shale, Merger and Acquisition Activities ......................................................................... 33
                                              Table 13:    Barnett Shale, Key Characteristics, 2011 ...................................................................................... 42
                                              Table 14:    Barnett Shale, Recent Wells Drilled and Initial Production Rates for EOG Resources, November
                                                           2011.............................................................................................................................................. 43
                                              Table 15:    Barnett Shale, Historic and Forecast Gas Production (bcfe), 2000–2016 ..................................... 45
                                              Table 16:    Barnett Shale (Newark East), Percentage Share of Texas’ Natural Gas Gross Production, 2005–
                                                           2011.............................................................................................................................................. 46
                                              Table 17:    Barnett Shale, Newark East, Gross Gas Production by County (bcf), 2011................................... 48
                                              Table 18:    Barnett Shale, Cost Per Well for Major Companies ($m/well), 2012* ......................................... 49
                                              Table 19:    Barnett Shale, Finding and Development Cost for Major Companies ($/Mcfe), 2012* ............... 49
                                              Table 20:    Barnett Shale (Newark East), Number of Drilling Permits Issued, 2004–2011 ............................. 50
                                              Table 21:    Barnett Shale (Newark East), Number of Wells Drilled, 1993–2011 ............................................ 52
                                              Table 22:    Barnett Shale, Planned Rigs by Companies, 2012* ...................................................................... 52
                                              Table 23:    Barnett Shale, Total Net Acreage by Major Companies, Acres, 2012* ......................................... 53
                                              Table 24:    Barnett Shale, Gross Gas Production by Major Companies (bcfe), 2011...................................... 54
                                              Table 25:    Barnett Shale, Planned Capital Expenditure by Major Companies, 2012 ..................................... 55
                                              Table 26:    Barnett Shale, Major Merger and Acquisition Activities, 2010–June 2012 .................................. 56
                                              Table 27:    Eagle Ford Shale, Key Characteristics, 2011 ................................................................................. 60
                                              Table 28:    Eagle Ford Shale, Oil and Gas Initial Production Rates by Major Companies, 2011 ..................... 61
                                              Table 29:    Eagle Ford Shale, Texas, Oil Production (MMbbl), 2008–April 2012 ............................................ 62
                                              Table 30:    Eagle Ford Shale, Texas, Gas Production (bcf), 2008–April 2012 ................................................. 63
                                              Table 31:    Eagle Ford Shale, Texas, Condensate Production (MMbbl), 2008–April 2012 ............................. 64
                                              Table 32:    Eagle Ford Shale, Texas, Historic and Forecast Oil and Gas Production (MMboe), 2006–2016 ... 66
                                              Table 33:    Eagle Ford Shale, Texas, Number of Drilling Permits Issued, 2008–April 2012 ............................ 67
                                              Table 34:    Eagle Ford Shale, Cost Per Well by Major Companies ($m), 2012*.............................................. 69
                                              Table 35:    Eagle Ford Shale, Finding and Development Cost ($/boe), 2012* ............................................... 70
                                              Table 36:    Eagle Ford Shale, Planned Rigs by Companies, 2012* .................................................................. 70
                                              Table 37:    Eagle Ford Shale, Major Companies by Net Acreage (Acres), 2011 .............................................. 72
                                              Table 38:    Eagle Ford Shale, Major Companies by Oil and Gas Production (MMboe), 2011......................... 74
                                              Table 39:    Eagle Ford Shale, Planned Capital Expenditure by Companies ($m), 2012 .................................. 75
                                              Table 40:    Eagle Ford Shale, Major Merger and Acquisition Activities, 2011–June 2012 .............................. 76
                                              Table 41:    Fayetteville Shale,
								
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