American oil and gas prospector Apache Corp stunned natural gas investors Thursday June 14, 2012 with a natural gas discovery announcement, the main point of which is, “ . . . . in terms of just resource, with the 1 well we drilled horizontal, we put 6 fracs on it. It’s going to go to 18 Bcf of gas, came on at 22 million a day, a tremendous resource.”
That’s 22 million cubic feet a day, an estimate of 18 billion cubic feet from the well in its primary production. One well, only one, in a shale formation. For investors in natural gas this is a long term, low profit, produce all you can at the lowest possible price – problem. Some folks swirling comments about Chesapeake would have the blame fall on one guy, but the facts are North America has a huge supply of natural gas and its gotten more huge last week. The industry has just been knocked onto its heels; the next big profit period will be years, probably a couple decades away.
For consumers natural gas has just become a very reliable source of fuel at historically low prices. For those thinking about natural gas vehicles and other uses of natural gas, the potential for long-term supplies at good prices has improved dramatically. In the meantime there will be economic growth, jobs and new products and services to distribute and use all this gas. North America’s luck has just turned.