Shale Gas Explosion

Keith Kohl

Written By Keith Kohl

Posted July 31, 2010

Welcome to the Energy and Capital Weekend Edition — our insights from the week in investing and links to our most-read Energy and Capital and sister publication articles.


Editor’s note: For more updated information from Keith Kohl on Shale Gas Stocks, click here…

To say that shale gas will play a major role in meeting our world’s energy demand is an understatement.


Take a minute and think how far shale gas has grown in the last five years…

It wasn’t until the success of the Barnett shale that U.S. drillers took notice. Although drilling the Barnett formation picked up considerably in the late 1990s, it wasn’t until 2006 that drillers struck it big.

Two things changed the course of shale gas development in the U.S.

The first was the advancements made in horizontal drilling. The second is that changes were made to the Clean Water Act in the 2005 Energy Policy Act. This change exempted natural gas drillers from disclosing the chemicals used in hydraulic fracturing.

For now, let’s push that hot-button issue to the side. I’ll cover it at a later date, so feel free to vent your “fraccing” anger at that time.

The point is, shale gas development exploded. It’s the main reason that our domestic natural gas production shot through the roof in 2008.

The shale boom extended beyond natural gas, too. Oil plays like the Bakken formation in North Dakota became wildly successful for investors.

It’s a story my readers at the $20 Trillion Report know that all too well. In fact they just recently earned a quick 33% gain after playing an upcoming Bakken producer.

Piggybacking on the U.S. shale fortune, both China and India are also looking to tap shale resources.

Reliance Industries, India’s biggest company, has made three shale gas investments in 2010. Some of you might remember when Reliance picked up a 45% stake in Pioneer Resources’ Eagle Ford shale assets for a cool $1.13 billion…

Now, the company is making a move into the prospective Horn River Basin in British Columbia. This time, their sights are set on Quicksilver Resources. As you know, I believe the Horn River Basin to be one of the best-kept secrets in natural gas discoveries.

China is taking a cue from the same investment page.

However, their target is much closer to home. ExxonMobil is supposedly in talks to develop an unconventional gas field the Ordos basin, located in northern China.

Now I’ll admit that ExxonMobil hasn’t been on my good list; I wouldn’t normally trust ExxonMobil to have much success in China.

However, I think their chances are much better after acquiring XTO last December.

For now, I’m sticking with the proven winners in U.S. shale — and so should you.

Enjoy your weekend,

Keith Kohl


Editor, Energy and Capital

P.S. Feel free to kick back and catch up on the top stories that have recently crossed my desk.

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