In this past Sunday’s edition, the Times accused the Chesapeake of exaggerating the productivity of shale gas wells and industry reserve estimates of future well performance.

Aubrey K. McClendon, Chesapeake’s Chief Executive Officer, commented, “Chesapeake stands behind all of its statements to shareholders, partners and the public regarding our natural gas discoveries and production.”

McClendon claimed the story was motivated by an anti-natural gas agenda.

“It is telling that the reporter chose not to interview a single reliable source and instead selectively quoted emails from unnamed sources or well-known industry critics dating back to as early as 2007 to invent a series of inaccurate and misleading allegations,” said McClendon

“If the Times was interested in reporting the facts and advancing the debate about the prospective benefits of natural gas usage to energy consumers, it could easily have contacted respected independent reservoir evaluation and consulting firms that annually provide reserve certifications to the U.S. Securities and Exchange Commission or contacted experts at the U.S. Energy Information Administration, the Colorado School of Mines’ Potential Gas Committee, the Massachusetts Institute of Technology, Navigant Consulting and others who would gladly have gone on record to confirm the abundant resources that have been made available thanks to the horizontal drilling and hydraulic fracturing techniques that Chesapeake and other industry peers have pioneered in deep shale formations across the U.S.”

“The Times questioned the economic merits of shale gas production in complete disregard and/or ignorance of supply and demand fundamentals as well as recent and forward market natural gas prices,” Chesapeake’s CEO continued.

McClendon listed companies active in shale gas development in the U.S. including Anadarko, BG, BHP, BP, Chevron, CNOOC, Conoco Phillips, Devon, EnCana, ENI, EOG, ExxonMobil, KNOC, Marathon, Mitsubishi, Mitsui, PetroChina, Reliance, Shell, Statoil, Talisman, and Total.

“Consider whether it could really be possible that all of these well-respected energy leaders, with a combined market cap of almost $2 trillion, know less about the economics of shale gas production than a single New York Times reporter, a few environmental activists and a handful of shale gas doubters?”

McClendon said that the industry continues to have learning-curve benefits that make U.S. shale gas projects attractive to the global energy industry.

Read the Full Statement from Chesapeake HERE

Read: The New York Times Is All Hot Air On Shale Gas from Forbes HERE

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

The deal announced on Tuesday will give Mitsui control of 32.5 per cent of Anadarko’s shale-gas assets in the state, where most of the 250,000 sq km Marcellus deposit is located.

The US natural gas producers have been entering into these joint ventures to help fund development of the shale – a highly technical and expensive process – while giving foreigners access to their experience and technology.

The Japanese company said it planned to spend another $3bn-$4bn on exploration and extraction, making Marcellus one of its largest energy investments. It said it was counting on rising demand in the US for natural gas as an alternative to coal and oil.

Natural gas is about 30 per cent less carbon intensive than oil and 50 per cent less than coal, but it still emits carbon. That makes it a less attractive option to lawmakers seeking to curb carbon emissions than renewables, yet natural gas is needed to back up wind and solar.

The industry believes Congress and governments worldwide will have to turn to natural gas as a bridge fuel until renewables can power a substantial portion of electricity demand. That has led to a series of joint-venture deals similar to Mitsui’s in the past two years as an increasing number of foreign energy companies eager to tap into America’s vast natural gas reserves seek to invest in independent companies, while estimates of US supplies continue to increase.

BP and BG Group of the UK; Statoil ASA the Norwegian energy company; and Eni, the Italian oil company, have all bought into the US gas industry in the past year to gain access to the US industry while tapping into the independent groups’ experience and technical expertise.

Like other Japanese trading houses such as Mitsubishi and Marubeni, Mitsui has expanded from its original import-export business to become an important financial backer of commodities and energy projects. It owns a Y250bn ($2.7bn) interest in Russia’s Sakhalin-2 liquefied natural gas project, its biggest such investment.

Mitsui expects the Marcellus development to last 60 years and produce 360m to 460m cc ft of gas a day at peak. Most of the $3bn-$4bn in extra development would be spent in the first 10 years to drill “a few thousand wells”. It intends to close the deal on March 15.

Source: Financial Times