Photo credit: Chesapeake Energy
Posted on 06/03/2014 3:13:50 PM PDT by ckilmer
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June 1, 2014 | Comments (0)
Photo credit: Chesapeake Energy
Chesapeake Energy (NYSE: CHK ) recently held its annual investor day. Among the many topics the company discussed was its emerging position in the Powder River Basin in the Rocky Mountains, which it sees becoming a world-class asset. That enthusiasm isn't just being conveyed by Chesapeake Energy. Earlier this year, EOG Resources (NYSE: EOG ) announced that it was adding four new Rocky Mountain oil plays to its drilling inventory while Devon Energy (NYSE: DVN ) noted that it was drilling high-impact wells in the Powder River Basin.
Needless to say, with some of America's biggest shale drillers all focusing on this new play, investors need to take a closer look at its potential. To help investors gain a better understanding of the play, I've put together the following slideshow. The presentation takes a close look at the emerging position of Chesapeake Energy, EOG Resources, and Devon Energy.
http://image.slidesharecdn.com/acloserlookatoneofamericasnextgreatshaleplays-140530084512-phpapp02/95/slide-1-638.jpg?cb=1401457646
These aren’t shale plays. They are tight sands.
You’ll have to click on the fool.com and scroll to the bottom to see the slide show.
They say Powder River Basin may be a world class play. Certainly that kind of praise from Devon and EOG means something. Does that mean its as big and as well laid out as the Bakken?
Looks like it will take another year or two to get the answer.
This sounds like a much bigger story than the Mississippi Lime formation in which so far it seems only Sandbridge energy has had much success
http://www.fool.com/investing/general/2014/05/21/the-bakkens-forgotten-cousin-and-1-company-making.aspx
They are tight sands.
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The area that has the oil is in the same one that has coal in Wyoming.
If you go to fool.com and look at the slides, you’ll notice that the oil formations are below the coal formations. You say those formations are tight sands?
Are these sands like the oil sands in Canada?
The coal is much shallower and is totally different. They are mined. These are just sands that are too marginal for vertical wells. The oil sands of Canada are pretty much a mining operation. The Niobrara is a tight chalk.
The Mississippian Lime is a dud. Most people have bailed from it. My advice would be to avoid any play that Chesapeake is hyping.
For those who want to see a video showing how horizontal drilling and fracking is done, Northern Gas and Oil has a great one. It’s 6 minutes.
It includes a visual piece on how fresh water aquifers are protected from contamination.
http://www.northernoil.com/drilling-video
These are just sands that are too marginal for vertical wells.
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So does this mean you don’t buy the argument that the powder river basin may be a world class play. That the fact that Chesapeake Energy is there and touting their success cancels out the success of Devon and EOG in the powder river basin. Does this properly characterize your argument?
The Mississippian Lime is a dud. Most people have bailed from it. My advice would be to avoid any play that Chesapeake is hyping.
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Yeah I read that they all bailed out of the Missippian Lime back in 2009 and headed for the Bakken.
so far it seems only Sandbridge energy has had much success in the Missippian Lime Formation.
http://www.fool.com/investing/general/2014/05/21/the-bakkens-forgotten-cousin-and-1-company-making.aspx
They are good, money-making plays. But they are nowhere near the size and scope of the Eagle Ford and Bakken. Any major company would be glad to have them as part of their portfolio.
Sandridge has part of the the sweet spot of this play. But it ain’t that sweet. Too little oil and too much water. But the wells are relatively cheap.
BTTT
Most of the Canadian Oil sands will be produced via In Situ methods like SAGD. Most of them are too deep for mining.
Most of the Canadian Oil sands will be produced via In Situ methods like SAGD. Most of them are too deep for mining.
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