Daily Marcellus for November 10, 2010

By Christopher Briem, on November 10th, 2010

I already mentioned the big news that Chevron is buying Atlas energy for the Marcellus play.

But this has all gone to a new level with no less than Foreign Policy publishing this piece: Why does big oil suddenly love Pennsylvania.

Forbes has a look at some of the new billionaires being made out of Marcellus investments…  I don’t notice any Pennsylvanians.

There is this.  A new report says there will be a glut in natural gas for the next decade, followed by a ‘golden age’ later on.

So why are we rushing so fast to develop as much shale gas in Pennsylvania now when prices are so low, leaving that much less for when demand and prices go up.  One thing for sure is that natural gas as a declining pressure curve.  You get the most gas out soon after you drill.  A recent overview of the pressure curve issues is in this: Marcellus Shale Decline Analysis. Looks like a college paper, but not bad and covers the basics pretty well.

Someone should do how much Pennsylvanians are losing by developing the gas at such low prices compared to what they would get if the gas was produced at prices as projected.  I also wonder if a slower pace of development would allow more Pennsylvanians to be hired and trained to work on these projects.

Anyway… you will know when the Marcellus stuff has escalated to a new level when we get new direct flights to the Middle East just as Houston just added.



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City Drilling

By Christopher Briem, on November 10th, 2010

For those watching what is up with City Council today and a proposed ban on gas drilling in the city (also being live tweeted by Bob Mayo).  Nothing new, but a map of where we have found recent oil and gas leasing within city limits is online here fyi.   Not much, but some and mostly concentrated in a few neighborhoods.   I am a bit curious by all the attention of late.  I think some firms wanted to come in and do this, but for the time being have already been dissuaded by the political push back.  When I first noticed commerical interest in drilling within city limits, there was not much notice.  I guess nobody really thought it was for real.  I still am a bit surprised a couple firms were trying to aggregate parcels in Lawrenceville which just has such tiny parcel sizes.

There is a picture out there somewhere of a natural gas derrick right in the middle of East Liberty during the great natural gas binge a century ago.  I can’t find it at the moment.. anyone know what I am referring to and have a source?



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Economic Events on November 10, 2010

By B.P.T., on November 10th, 2010

The Mortgage Bankers’ Association purchase index was released at 7:00 AM EST, and there was a week to week increase of 5.5% in the Purchase Index and a week to week increase of 6.0% in the Refinance Index as interest rates remain near record lows.

At 8:30 AM EST, the U.S. government will release its weekly Jobless Claims report.  The consensus is that there were 450,000 new jobless claims last week, which would would be 7,000 less than the number released last week.

Also at 8:30 AM EST, the Import and Export Prices index for October will be released, providing some data that can be used to monitor the threat of inflation.

Also at 8:30 AM EST, the International Trade report for September will be released.  The consensus is a deficit of $45 billion, which would be a decrease of $1.3 billion from August.

At 10:30 AM EST, the weekly Energy Information Administration Natural Gas Report will be released, giving an update on natural gas inventories in the United States.

At 11:00 AM EST, the weekly Energy Information Administration Petroleum Status Report will be released, giving investors an update on oil inventories in the United States.

At 2:00 PM EST, the Treasury budget for October will be released.  The consensus is a deficit of $148 billion, which is larger than the historical average, but less than last September.

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