“Today, the majority of our drill rigs and our operations are focused toward building out and developing our liquids-based business in shale in the Eagle Ford,” Kerr said. “That continues to be the path that we go down because that's where we see the highest returns.”
The boom in oil and gas production has helped the U.S. cut its reliance on imported fuel. The U.S. produced 84 percent of its own energy in 2012, the most since 1991, EIA data show. The measure of self-sufficiency rose to 88 percent in December, the highest since February 1987.
Hydraulic fracturing of shale formations in the U.S. has boosted supplies of gas and sent prices tumbling. The process, in which water, sand and chemicals are injected into shale to release gas, has drawn opposition from environmental groups concerned about tainted water supplies and air pollution.
Eoin Treacy's view BHP Billiton is not the only company to have overpaid for access to shale reserves. However while BHP Billiton's shale investment made global headlines, energy only accounted for 17% of revenues in 2012. Chesapeake Energy is much more dependent on energy and also rushed to acquire as much acreage as it could without paying heed to the fact the prices were unusually high. These two companies were not alone in such profligacy and the decline in natural gas prices from a 2008 peak near $14 to 2012's low below $2 weighed heavily on the sector
Now that natural gas prices have pushed back above the psychological $4, I thought it might be instructive to revisit some of the shares that may benefit from somewhat higher natural gas prices.
Enerplus Corp's resources are mostly located in Western Canada. The company has been cutting its dividend as revenues declined with natural gas prices but it still yields 7.47%. If natural gas and Western Canada Select Crude Oil prices stabilise, the potential for dividend increases should also improve. The share has been ranging above C$11 since June and a sustained move below that level would be required to question medium-term scope for higher to lateral ranging.
Rexx Energy's revenues are split almost equally between oil and natural gas. The share has been largely rangebound since 2010 and broke successfully above $15 in March. A sustained move below that level would be required to question medium-term scope for additional upside.
Canada and US listed Encana has been ranging mostly above C$17 since early last year and is currently firming from the lower side.
Southwestern Energy hit an accelerated peak near $50 in 2008 and has been confined to a volatile range since. The share has held a progression of higher reaction lows for a year and found support in the region of the 200-day MA, near $35 last week. A sustained move below that level would be required to question medium-term scope for additional upside.