Baltimore, MD--

A geological formation lying underneath 17 Texas counties is poised to become one of the most important gas fields inside the United States. And with natural gas prices set to rise significantly over the next few years, it's only a matter of time until it takes off.

I know our focus has been on the oil-rich sands of Alberta recently, but I've had quite a number of readers asking about natural gas. And there's one play right now with the most potential: The Barnett Shale Play in Texas.

Before delving deeper into the Barnett resource, however, we need to get inside the details...

Why Barnett Shale Play Is the Next Big Play

Here's what it all comes down to: Is it economically feasible? Much like the Canadian sands, which require high oil prices to be profitable, the tight gas reservoirs in the Barnett play require high natural gas prices. Without that, we won't see many companies getting their hands dirty.

So in order for us to be bullish on this play, we need to believe that natural gas prices are going to go through the roof. Experts have estimated that the Barnett Shale is economical starting at $5 per Mcf.

Only a few years ago, we were paying under $2 per Mcf.

Prices today, however, are much different. Today, natural gas costs over $6 per Mcf.

Think about that for a second . . .

Natural gas prices have tripled over the last few years.

As you can see for yourself in the chart below, the price of natural gas hasn't fallen below $5 per Mcf since last year. Typically, natural gas prices peak during winter when the demand for heating is at its greatest. Prices then usually bottom out in summer as oil prices peak. I wouldn't be surprised to see natural gas over $9 per Mcf this winter.

I know a majority of my readers would agree with our bullish stance on energy prices. But the next step is to figure out what to do from there.

Barnett Shale... the Future of Natural Gas?

If the Canadian sands are the future in oil, then the future of U.S. natural gas production is in Barnett Shale.

The geologic formation stretches over 5,000 square miles from Dallas to Fort Worth.

And when we're talking about size, this play is absolutely huge. Many geologists believe that the Barnett Shale play could possibly be the largest onshore natural gas field in the U.S., with 2.5 trillion cubic feet of natural gas! I've seen reports where resource estimates were as high as 30 trillion cubic feet.

This isn't your typical conventional gas play, though. The Barnett Shale deposit is a tight-gas reservoir, meaning that it has low permeability. In other words, gas flows through the shale at a much lower rate than elsewhere.

Now that the play is economically profitable, producers are starting to break through the technological barriers. In my next report on Barnett Shale, we'll go deeper into how companies are overcoming those obstacles. And the best part is that some of these companies stand to make some huge gains from this world-class natural gas basin.

Until next time,

Keith Kohl

P.S. I had the pleasure of listening to Brian Hicks talk about the role that Barnett Shale will play in the future natural gas markets at our Profit from the Peak Summit a few weeks ago, but trust me, this is something you'll want to see for yourself. If you're interested, you can check it out here.