Tuesday, October 04, 2011

Shale Past - Shale Future

While shale development is even more in the news than normal.... Here is something worth reading carefully.

One of the biggest players in the whole shale gas play to date has been Chesapeake Energy.  Everyone should read Chesapeake's October investor presentation. (update: darn it.. I didn't save it and they seem to have pulled their October presentation offline??)  I spent just enough time on Wall Street to not really take investor presentations all that seriously, or at the very least discount the hyperbole,  but lots of info in there and some pretty clear foreshadowing of their intentions. 

Read page 23 and page 24 first.  Then go back and read page 20 on where the oil play is.  Once again: go west. 

Also, it seems the big hope is all about future auto use of natural gas as what will support natural gas prices out into the future.  On that the USAToday has a piece on one of the few commerical vehicles you can buy that run on Natural Gas.  See:  Honda prices new tragically ignored natural-gas Civic.  It was for a long time the only natural gas vehicle for retail sale in the US. I don't know if that is still true at the moment.   I was just curious and looked up the official Honda web site for the car.  I plugged in some local zips to find a dealer who would either sell or even service a NG vehicle, and it wouldn't give me one in Pennsylvania at all.  The USAToday article says Honda has just now increased its retail availability for these NG cars to 38 states.  Is Pennsylvania one of them?


Anonymous MN said...

I guess this may answer the "why" question that keeps coming up, given the fact that gas prices are so low.

Interesting quote there on the bottom of page 9:

"The best time to make money is at the point of maximum negativity on natural gas prices. Are we still there? Actually, we think we're now past that time..."

Tuesday, October 04, 2011 9:55:00 AM  
Anonymous The Wiz said...

I tried to download the report and it froze my system so I can only speculate on the references to the report. CHK CEO Aubrey McClendon announced last winter that CHK would be getting out of the pure natgas business and concentrate on oil and wet gas development because of the depressed prices for natgas. That is why they have been so active in Ohio and the Utica Shale play.

CHK also announced a billion dollar program to increase natgas usage nationwide. Wish other gas companies would follow suit.

As for the Honda Civic, they had announced this spring that the vehicle would be available nation wide by year end. I don't know if they decided to limit it to 38 states or if they will be in all states by year end.

The problems with them is that they cost substantially more, a home filling station costs an additional $2000-$3000 and take 8 hrs to refill, and there are a very limited number of public stations. Thus a CNG vehicle would have to be the second car just for local commuting until more CNG stations are opened.

I don't know of any other factory-equipped natgas vehicles but there are several companies that sell conversion kits, again expensive and can cause warranty issues. But GM announced a joint venture with a company in Indiana to develop natgas engines that could be options in several GM models. Hopefully they will be available in a couple of years.

Tuesday, October 04, 2011 11:03:00 AM  

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