In a remote corner of northeastern British Columbia, a massive shale-gas field has been discovered by the Apache Corp. The field is estimated to have 48 trillion cubic feet of recoverable natural gas. According to Reuters:
The company has drilled three wells into its holdings in the Liard Basin in British Columbia, just south of where the province’s northern border meets the borders of the Yukon and Northwest Territories. Only one of the three wells drilled in the region was treated with the multiple-stage hydraulic fracturing process that has been key to unlocking North America’ prolific shale-gas reserves. That well, which was “fracked” six times, delivered 21.3 million cubic feet of gas per day over its first thirty days of production, which Apache said was the most prolific shale-gas test well ever drilled.
This announcement of the shale-gas find was part of a presentation made by Apache Corp’s John Bedingfield, VP for Worldwide Exploration. At that presentation he also discussed other activities as follows:
Along with its Liard field, the company said its 580,000 acres of land in the Mississipian Lime field in Kansas and Nebraska could contain as much as 2 billion barrels of oil while its holding in Montana’s Williston Basin may hold another 1 billion barrels. As well, it’s targeting as much as 1.3 billion barrels of oil in Alaska’s Cook Inlet and 1.4 billion barrels from its holding off the shore of Kenya. It will drill in both regions later this year. Apache said its holdings in western Oklahoma and the Texas panhandle could also hold another 5.4 billion barrels of oil equivalent while the Permian Basin in west Texas and New Mexico hold 3.4 billion barrels of oil equivalent.
As the supply of natural gas and oil increases, the prices are sure to drop. The price of natural gas in the US has already taken a header as major discoveries have been made in recent years. Fuel for the production of electricity is tending away from coal to natural gas. This move is more than just low natural gas prices as it is also being force by new EPA regulations (which may be reversed if Mitt Romney wins the upcoming election.).
Crude oil is more readily transportable from wellhead to the user giving it a wider world market. But fracking discoveries in other parts of the world may bring supplies that exceed demand and thus lowering of crude oil prices as well. Then the floor price will probably be set by the cost to produce and make a profit when getting oil by fracking.