Natural gas prices are hovering around $3.58 this week. Natural gas futures have risen above $4. Prices are creeping up, and it is a good sign if you have a stake in shale gas.
Production has slowed down, and this has resulted in an unofficial cap – contributing to a rise in prices. But production will continue to be necessary, especially since many energy companies do not have the infrastructural means to capture associated gas as shale oil production booms.
That is why places like the Bossier Shale are so important.
If you’re looking for rich natural gas plays, then the Bossier Shale is a place to watch out for. It is mostly known for its rich natural gas reserves, on par with other shale gas-rich areas like the Anadarko Basin or the Barnett Shale.
The Bossier is located within the Haynesville Shale, in the East Texas and Northern Louisiana territories. The Haynesville is said to have a natural gas reserve estimate of 251 trillion cubic feet.
Although some consider the Hayesville and the Bossier one in the same, the Bossier actually is above the Hayesville. Known for its thickness, the Bossier could be anywhere from 750 to 1000 feet thick versus the Haynesville’s 200 feet.
The thickness may be problematic for producers suffering from high production costs, but the risk is far worth the reward.
The play was first drilled in 2005, and it became viewed as a major natural gas source in 2008, according to Halliburton (NYSE: HAL).
The most profitable areas can be spotted within the upper areas – the first 500 to 600 feet.
The most prosperous counties in Texas are Panola, Shelby, and Harrison. In Louisiana, profitable counties include Desoto, Red River, Webster, Caddo, and Bossier.
Major oil companies that have been in the Bossier are Chesapeake Energy (NYSE: CHK) and Anadarko Petroleum (NYSE: APC).
To get an idea of how prosperous the Bossier is, consider that Anadarko made a solid discovery with the A-1 well in 2003. The well initially showed a discovery of 241 feet of natural gas and flowed at a rate of 8 million cubic feet per day through a pipeline.
Anadarko also worked in the Dew-Mimms field, which has over 1 trillion cubic feet of natural gas, producing 136 million cubic feet per day.
For Chesapeake, the Bossier generated 9.4 million cubic feet per day. Results were lagging when compared to the Haynesville, but Chesapeake has been optimistic about the Bossier in the coming years.
Whether big or small, companies are seeing positive success rates with wells and flows.
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But is the Bossier a Good Investment Play?
There’s no doubt the Bossier Shale is a good investment for natural gas. The industry as a whole may need higher demand for the commodity, but the Bossier is a good formation to keep on your investment radar.
If you want to get in, start on a smaller to moderate level of investment. Let’s remember that big companies like Shell (NYSE: RDS-A) and Chevron (NYSE: CVX) have lost out in stock prowess because they invested too much in natural gas. Still, there is time for Big Oil to catch up if these larger companies shift more of a focus on shale oil.
Most of the investment excitement is for smaller companies that have doubled down on shale oil drilling.
But there is a degree of hope for you natural gas investors.
As oil prices continue to rise from growing tensions in the Middle East, there may be more of a focus on natural gas in the future – at least, that’s what Exxon Mobil (NYSE: XOM) hopes.
Nevertheless, the Bossier is a promising site for natural gas and will become significantly more valuable as natural gas becomes more profitable to produce in the future. There is still the issue of high production costs for natural gas, but these types of trends tend to ebb and flow over time.
And I wouldn’t be surprised if big companies like Chevron and Exxon show an interest in the Bossier in the near future. Exxon already has a heavy hand in Haynesville, and it will only be a matter of time before Big Oil shines a heavier light on the Bossier.
Natural gas has gone through a rough patch, but energy companies are still invested in the commodity. This is a play that is definitely worth cataloging if you’re a natural gas investor.
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