Maninder Batra writes: Today, in the energy markets we hear a lot of euphoria and hype about shale gas, and how it has effectively neutralized the Natural gas cartel ,GECF . But, there has some bad news for unconventional gas industry , when Chesapeake’s CEO Aubrey McClendon declared that the shale gas reserves have been discovered already and there will be no more new discoveries in the USA.

So, if we go by Mr.McClendon’s analysis , natural gas prices will start rising again ,and overall this will be benefit Big Coal ,LNG suppliers and Russia’s natural gas export monopoly Gazprom. Also, the extremely low natural gas prices at Henry hub, and higher production costs will soon cause a wave of mergers and acquisitions according to oil and gas consultant Wood Mackenzie.

Considering the fact that one of the best shale plays in USA , Barnett Shale has a wellhead cost of 3.47$/mcf and the price at Henry hub is 3.395$/mcf,it is not economical to sustain shale gas production

Sooner or later , there will be a series of M & A ‘s in the unconventional gas industry and only the fittest will dominate.

By Maninder Batra

maninder300 AT hotmail.com

© 2010 Copyright Maninder Batra - All Rights Reserved
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