The Eagle Ford deal involves about $15 million in upfront cash payment while the Haynesville deal has no upfront cash consideration.

Goodrich expects to spud its initial Eagle Ford shale well in the second quarter and run one or two rigs in the play during the second half.

The acquisition boosts the company’s Haynesville shale inventory to about 89,500 net acres.
Goodrich maintained its 2010 capital expenditure budget of $255 million, but said it reallocated about $50 million, or about 20 percent of the amount, to leasehold, drilling and completion costs associated with the Eagle Ford Shale oil play.

Source: Reuters

http://www.reuters.com/article/idUSTRE63B22520100412

Production growth will be driven by development of the company’s shale gas holdings in the onshore US and several oil-weighted, deepwater “mega-projects” spread across the world.

Shale gas plays are also expected to play an important role in Anadarko’s 7% annual growth rate projections. The independent has allocated $530 million (10%) of its projected 2010 spending to the Marcellus, Haynesville, Eagle Ford and Pearsall shale plays, where it holds a combined 600,000 net acres.

Production from the four emerging shale gas plays is expected to increase 60% annually over the next five years. Anadarko estimates they contain some 50 trillion cubic feet of natural gas equivalent of gross unrisked resources.

Anadarko recently partnered with Japan’s Mitsui in the Marcellus play, where it already had a separate partnership in place with Chesapeake Energy. The firm held 350,000 net acres in the play before the Mitsui deal was unveiled on Feb.2.

Source: The Oil Daily, March 2, 2010

“A year or two from now, the activity over in Europe is going to be absolutely frenetic, and so you’ve got to get in there early,” said Craig Steinke, executive chairman of junior explorer Realm Energy International (TSXV:RLM). Realm, which has offices in Vancouver and London, is involved in eight different shale basins in seven European countries, though it doesn’t disclose specifics for competitive reasons.

The likes of ExxonMobil Corp. (NYSE:XOM), Royal Dutch Shell PLC (NYSE:RDS), ConocoPhillips (NYSE:COP) and Chevron Corp. (NYSE:CVN) have begun to grab stakes in shale formations in Poland, Germany, Hungary, Ukraine and other European countries.

Some may wonder why North American companies would look for shale opportunities across the Atlantic when there are plenty of promising plays in their own backyard.

“In North America as a whole, the lands have been bid up to significantly high prices,” said Steinke. “If you don’t have the land, you’re on the outside looking in.” In Europe, energy companies can negotiate directly with government authorities to acquire large, contiguous tracts of land – though it may not be that way for long if activity picks up, said Steinke. “Realm’s goal is to be an early mover on acquiring the lands. It’s going to put the company in a very advantageous position as the momentum builds,” he said. “The opportunity won’t be there forever, that’s for certain.”

Shale is a ubiquitous type of sedimentary rock that is as tough as concrete. Freeing natural gas molecules from within the rock is no easy feat as it requires enormous amounts of water, chemicals, sand and, above all, technical know-how. North America’s shale gas industry has its roots in the Barnett formation in north-central Texas, where energy companies began honing their techniques about 10 years ago.

Since then, horizontal drilling and multi-stage fracturing have spread to the Marcellus play in New York and Pennsylvania, the Haynesville play in Texas and Louisiana and the Horn River and Montney plays in northeastern British Columbia.

Realm collaborates with U.S. energy services giant Halliburton Co. (NYSE:HAL), which has been active in virtually all of North America’s shale gas plays. Halliburton has been helping Realm parlay expertise it garnered from North American shale gas plays into European ones, which share many of the same characteristics.

European shale gas is also on the radar of Talisman Energy Inc. (TSX:TLM), already a big landholder in the Marcellus and Montney formations. “We haven’t done any deals yet, but we are looking hard and depending on how things go, we could see an entry into an international opportunity,” Richard Herbert, Talisman’s executive vice-president of exploration, said on a conference call with analysts and reporters earlier this month.

Another reason European shale gas could be attractive is pricing. North America is currently dealing with a glut situation, in which supply is outpacing demand. European countries are also eager to stop relying on natural gas imports from Russia, which has had a history of suddenly shutting off supplies amid disputes with its neighbours.

It’s going to take several years of work before European shale gas is commercially viable, said Michael Dawson, president of the Canadian Society for Unconventional Natural Gas. Energy companies already know all the ins-and-outs of North America’s geology because so much conventional oil and gas drilling has taken place there. That’s not the case in Europe, he said.

There also isn’t much there in the way of specialized equipment needed to drill the high-tech wells. So all of that has to be built or transported from elsewhere. “I think there has to be a realization that while everybody seems to be getting on the bandwagon with shale gas right now, it just doesn’t happen overnight,” said Dawson. “It’s not a slam dunk that the shale gas potential in Europe is going to be successful.”

Reported by Lauren Krugel in Calgary for THE CANADIAN PRESS

Source: MSN.ca

The price of natural gas has fallen from $13 per million British thermal units to $4 per million btu in less than a year. Today, coal provides almost 50% of the U.S.’s electricity while natural gas provides 21%.

The price and amounts of natural gas in the U.S with the shale play in Haynesville (area in Louisiana that could become the world’s largest producing gas field) could give ‘dirty’ coal a run for its money. Coal is cheap and an entrenched old technology. Clean atural gas and technology improvemets will cause coal costs will dip even further. The growth in takeup for domestic, secure and clean natural gas is going to be explosive !

Posted: C. Keddy

The release of a major new study today that boosts estimates of U.S. natural gas resources is shaking debates over the use and regulation of a fuel that could help slow global warming but could create other environmental concerns.

The report by the Potential Gas Committee, a nonprofit group that provides closely watched analyses of U.S. resources, shows a 35 percent jump in domestic gas estimates.

The United States has a total resource base of 1,836 trillion cubic feet (tcf) worth of likely and potential resources, the report says, a sharp jump from the last estimate two years ago of 1,321 tcf, and the highest in the group’s 44-year history.

With the addition of Energy Department estimates of proved reserves, the total U.S. future supply is 2,074 tcf, a rise of more than 35 percent from the committee’s last biennial estimate.

The increase is largely due to the viability of tapping gas from shale formations, such as the Barnett in Texas, the Marcellus in Appalachia, the Haynesville in Louisiana and the Rocky Mountains.

“New and advanced exploration, well drilling and completion technologies are allowing us increasingly better access to domestic gas resources — especially ‘unconventional’ gas — which, not all that long ago, were considered impractical or uneconomical to pursue,” said John Curtis, professor of geology and geological engineering at the Colorado School of Mines, which supports the committee’s work.

But the increasing use of a technique called hydraulic fracturing to access these shale plays has sparked a Capitol Hill battle over regulating the extraction method. Several Democrats have introduced legislation that would bring the technique under Safe Drinking Water Act regulation — reversing an exemption in a 2005 energy law — and require disclosure of chemicals used in the process.

The industry and allied groups are fighting the effort. They say it would slow access to what the new report demonstrates is an abundant domestic energy source.

“Hydraulic fracturing is the Rosetta Stone of natural gas development. With it, otherwordly amounts of shale and tight-pocket gas can be found, produced and delivered to Americans who need it. Without it, those resources remain trapped underground,” said Chris Tucker, a spokesman for Energy In Depth, an industry-backed group that recently launched an effort to fight the legislation.

A spokesman for Rep. Diana DeGette (D-Colo.), the sponsor of the fracturing legislation, said her bill is not about preventing gas production, which she supports, but that the extraction technique must have more oversight and disclosure.

“I would definitely say that she believes it is a necessary technology for the energy market. She also believes we need to ensure the health of the public as these processes are taking place,” said DeGette spokesman Kristofer Eisenla.

Report sparks climate debate

Meanwhile, the report is also significant in light of pending congressional efforts to enact a sweeping bill to place mandatory limits on U.S. greenhouse gas emissions.

House Democratic leaders plan to bring a sweeping climate bill to the floor in the coming weeks that is sponsored by Energy and Commerce Chairman Henry Waxman (D-Calif.) and Rep. Ed Markey (D-Mass.). The greenhouse gas caps in the Waxman-Markey bill would curb U.S. emissions by 17 percent by 2020 from 2005 levels, with an 83 percent cut by 2050.

Burning natural gas currently provides about a fifth of U.S. electric power, and gas produces half the greenhouse gas emissions of coal. However, switching to gas creates concerns about the costs that could accompany increased demand if supplies were tight.

Joe Romm of the Center for American Progress, a liberal think tank, has called attention in recent weeks to the higher U.S. supply estimates driven by shale gas plays. He calls increased estimates a “game changer” and very good news.

Romm said the new report underscores that the 2020 emissions reduction targets in the Waxman-Markey bill are certainly achievable and may even be too weak. That is because with ample supply, gas will remain at a moderate price — around $5 to $6 per million British thermal units — and will keep compliance costs down, he said.

He noted that a key factor behind the cost of capping carbon is the cost to replace existing coal plants. With cheaper natural gas, that can more easily be done with idle natural gas plants built during a overbuild in the 1990s that are connected to the grid system, but the fuel has been too costly to use until now, said Romm, a former DOE official.

“I think this is a big deal,” Romm said of the higher estimates. Additional gas will also encourage more utilities to build wind generation, as natural gas is currently the best backup power for the intermittent energy, he said.

Pickens plan

But others have their eye on these U.S. supplies as a way to power vehicles.

Famed Texas oilman T. Boone Pickens is spending aggressively to promote his plan to transition vehicles such as heavy-duty trucks and city fleets to natural gas in order to curb demands for oil imports. Pickens also supports a major build-out of wind for electricity, which would help free up natural gas for vehicles.

He quickly seized on the new report.

“Obviously, this underscores what Boone has spoken about for well over a year and gives further credibility to a key aspect of the Pickens plan, and that is using natural gas as a transportation fuel alternative to foreign oil, diesel and gasoline,” said Jay Rosser, a spokesman for Pickens.

“This should quiet any skeptic who is concerned about using our abundant supplies of natural gas as an important transitional fuel,” he added.

For more news on energy and the environment, visit www.greenwire.com

Posted by: c. Keddy

Today, in the news and on the internet there is discussion about drilling for natural gas and our water supply. There is a common perception that shale gas development used a lot of water and may impact the drinking water quality due to hydraulic fracturing. The quantity of water needed to drill and fracture a horizontal shale gas well commonly ranges from about 2 million to 4 million gallons, depending on the geologic formation.

These volumes may seem very large to you, but I assure you that they are small by comparison to some other uses of water, such as agriculture, electric power generation, and municipalities. These volumes of water also generally represent a small percentage of the total water resource use in each shale gas area.

Calculations indicate that water use for shale gas development will range from less than 0.1% to 0.8% of total water use by basin.

In some shale gas areas, the water needs may challenge supplies and infrastructure. As operators look to develop new shale gas plays, communication with local water planning agencies, state agencies, and regional water basin commissions can help operators and communities to coexist and effectively manage local water resources. A successful technique would be identification of supplies that do not interfere with the community needs. Similarly the concerns for fracturing fluid contaminating water may be low since fracturing fluid is 95% water and 5% chemicals. The service companies doing a hydraulic fracturing job ensure through state of the art monitoring systems that fracturing fluid does not leak into fresh water aquifers.

The long-term sustainability of shale gas operations in a given region depends on several factors such as: working closely with the local, state, and federal regulatory environment, coping with the stress placed on the local fresh water supplies and effective and economical wastewater management plans.

To date, not a single case of water aquifer contamination or excessive use of water straining public supply of water has been observed or reported in the United States. The role natural gas is playing in transitioning America’s energy in a more sustainable direction and thereby ridding us of our dependence on foreign oil. Natural gas is a “bridge” fuel, it’s domestically abundant, it’s cheap, and it’s clean so we should give it the go-ahead as our breakthrough solution to oil. Shale gas is the future of our gas supply and we need to encourage everyone to move to natural gas.

If you live in an area with a shale formation near you, we would love to hear from you about your views on natural gas and your local water supplies.

C. Keddy

The other theory of natural gas formation is the inorganic theory which speculates that hydrocarbons did not originate from buried plant and animal material, but instead were trapped inside the Earth as it formed. This theory is most likely not applicable to shale gas.

HOW IS SHALE GAS FOUND ?

Exploration for gas shales is similar to exploration for conventional reservoirs which, for an unexplored basin, usually includes:
• review of existing information
• aerial surveys to gather data regarding magnetic fields, gravity and radiation
• seismic surveys to locate and define subsurface structures capable of trapping natural gas
• exploration drilling to test subsurface structures for the presence of hydrocarbons
• logging the wells to determine porosity, permeability and fluid composition

In the case of shale gas, the primary targets are shale formations with interbedded porous and permeable fine-grained sediments and natural fracture systems. Down-hole tools used to find fractures include density compensation, caliper and temperature logs, and formation microscanner imaging. Low-altitude, airborne multispectral imaging is a new tool used to locate subsurface microfractures and prospectivity of shale formations.

WHERE IS SHALE GAS FOUND ?

Shale gas in the United States
There are five major shale basins in the United States from which shale gas is produced. To date, more than 40,000 wells have been drilled. There are seven other shale basins from which there has been no production.

Shale gas in Canada
Currently, there is no commercial shale gas production in Canada. Canada has a number of prospective shale gas targets in various stages of exploration and exploitation in British Columbia, Alberta, Saskatchewan, Ontario, Quebec, and Nova Scotia.

HOW IS SHALE GAS PRODUCED ?

In order for a shale play to produce, the rock must have geochemical attributes that indicate that the organic content (kerogen) has been sufficiently heated to produce natural gas in the formation. If the shale does not reach a high enough temperature over the millions of years that it was buried, then it is not prospective for thermogenic gas generation. Conversely, if the rock reaches too high a temperature, the natural gas (methane) that is produced can break down into non-combustible gases such
as carbon dioxide.

To understand the geochemical (maturity, organic content), mechanical (stress, brittleness) and in-situ rock properties (permeability, porosity, water saturation, reservoir pressure, gas content), wells are drilled, and rock samples from core and cuttings are recovered and sent to specialized laboratories. Traditional logging tools do not provide sufficient information for evaluating shale prospectivity, and can be misleading unless calibrated to lab results from actual rock samples.
Because shale has such low permeability, gas will generally not flow unless the rock has been fractured. This involves injecting high volumes of water, mixed with sand, at high pressure into the targeted shales. This fractures and props open the rock, thus allowing the gas trapped in the reservoir rock to flow to the wellbore.

Generally, vertical wells are used to explore the shale resource and determine the best places for development, and then horizontal wells are drilled for commercial production.

Horizontal well drilling and multi-stage fracture stimulations have been the key to obtaining economic productivity in most shale reservoirs. Horizontal wells can be drilled over 1000 meters laterally through the productive shale and then 5-10 individual intervals are fracture stimulated. This technique connects larger volumes of the resource into a single wellbore, resulting in higher rates and reserves, and ultimately, a commercially viable project.

Shale plays can hold an enormous amount of natural gas and are capable of producing gas at a steady rate for decades.

C. Keddy

Read more about EnCana – the Canadian natural gas giant.

By: Caroline Keddy