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This reemerging shale play is perfectly positioned for lng exports

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The reemergence of the Haynesville Shale has Chesapeake Energy, EXCO Resources and Freeport-McMoRan in the perfect position to profit as America starts exporting natural gas.

The reemergence of the Haynesville Shale has Chesapeake Energy, EXCO Resources and Freeport-McMoRan in the perfect position to profit as America starts exporting natural gas.

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  • http://www.eia.gov/naturalgas/crudeoilreserves/
  • http://www.aga.org/KC/ABOUTNATURALGAS/ADDITIONAL/Pages/HowtoMeasureNaturalGas.aspx
  • file:///C:/Users/Owner/Downloads/2014_AD_Poster_Sessions%20(1).pdf
  • http://media.corporate-ir.net/media_files/IROL/10/104617/2014_Analyst%20Day.pdf
  • file:///C:/Users/Owner/Downloads/Q1%202014%20Earnings%20Review.pdf
    And https://www.flickr.com/photos/royluck/5556781051/in/photolist-
  • file:///C:/Users/Owner/Downloads/Q1%202014%20Earnings%20Review.pdf
  • file:///C:/Users/Owner/Downloads/Q1%202014%20Earnings%20Review.pdf
  • http://www.fcx.com/ir/2014present/Howard_Weil_2014_Final_small_MAR14.pdf and https://www.flickr.com/photos/andyarthur/7734855298/in/photolist-deqma4-nMH1B3-7rwdK9-6bfNWz-foGiXm-5Er79u-eRVuDz-hwBJzg-4Gpbv3-4Gpcz9-4GjZqk-fFf1xu-fFf11b-gW29af-gW2ofQ-gW2o4N-gW2ghn-gW27Km-gW29bQ-gW2pnm-gW2nwA-gW3jYM-gW2dg3-gW28oW-gW2uxF-d6u3ES-4GpaYy-etzyFY-cMva17-5EmPqD-5Er7g1-5Er72L-5Er769-h5vagQ-h5uQsD-h5wbqR-h5vaY1-h5vayd-dQcqcX-9rTqCz-9rWhdf-fP4kri-nvoLvK-fP4kiz-6smTmS-cKmnpq-bg6vWP-7x1piA-6shJke-4Aup3r
  • file:///C:/Users/Owner/Downloads/Q1%202014%20Earnings%20Review.pdf
  • Transcript

    • 1. This Re-Emerging Shale Play Is Perfectly Positioned for LNG Exports Photo credit: Chesapeake Energy
    • 2. The Haynesville-Bossier Shale in Texas and Louisiana is loaded with natural gas.
    • 3. According to the U.S. Energy Information Agency, it holds 17.7 trillion cubic feet of proven reserves.
    • 4. That’s enough gas to meet the needs of 17.7 million American households for 15 years.
    • 5. There’s probably more gas than that, but it’s not currently economical to drill.
    • 6. The economics will change as natural gas export facilities begin to come online.
    • 7. That’s because the Haynesville Shale … … is perfectly positioned to fuel natural gas exports. Source: Chesapeake Energy Investor Presentation
    • 8. That sets the following companies up for future profits.
    • 9. Chesapeake Energy • 387,000 net acres in the Haynesville. • Estimates those acres hold 10 trillion cubic feet equivalent of recoverable natural gas reserves. NYSE: CHK
    • 10. Chesapeake Energy • One of the leading drillers in the play with 728 producing wells. • Chesapeake Energy has at least 1,900 undrilled future well locations. • Company operating 7-9 rigs in 2014, which are drilling wells more than million dollars cheaper than just last year.
    • 11. Chesapeake Energy • One of the leading drillers in the play, with 728 producing wells and average daily production of 495 mmcfe. • Meanwhile, Chesapeake Energy has lots of running room, with at least 1,900 undrilled future well locations. • The company is operating seven to nine rigs in 2014, which are drilling wells more than $1 million cheaper than just last year.
    • 12. EXCO Resources • 70,000 net acres in the Haynesville- Bossier. • Currently 600 high- rate-of-return drilling locations. • Up to 1,206 locations with higher gas prices. NYSE: XCO Photo credit: Flickr/Roy Luck
    • 13. EXCO Resources • One of the leading drillers in the play with 728 producing wells. • Chesapeake Energy has at least 1,900 undrilled future well locations. • Company operating 7-9 rigs in 2014, which are drilling wells more than million dollars cheaper than just last year.
    • 14. EXCO Resources • It spent $320 million to bulk up on its position in a deal with Chesapeake Energy last year. • It reduced its drilling costs from $9.5 million in 2011 to $7.2 million at the end of last year. • At current prices and pace, EXCO can drill for 14 years and earn a 20%-plus internal rate of return. • As the price of gas moves up, so do EXCO’s drilling opportunities and returns.
    • 15. Freeport-McMoRan Copper & Gold • Estimates its resource potential in the Haynesville is about 5 trillion cubic feet equivalent of recoverable natural gas. NYSE: FCX Photo credit: Flickr/Andy Arthur
    • 16. Freeport-McMoRan Copper & Gold • Freeport-McMoRan acquired its Haynesville Shale position last year, when it bought Plains Exploration & Production. • Its current focus is to hold acreage and manage the asset for cash flow. • However, once gas prices improve, Freeport- McMoRan has 11,000-plus future locations that can be drilled.
    • 17. Investor takeaway All three companies have the potential for needle-moving growth if natural gas prices improve as America begins to export gas.
    • 18. OPEC’s Worst Nightmare