Natural Gas

   I told several people a few years ago that this was going to happen but they didn’t believe me then, now here is a little proof of what is going on around us. If I were to ask you to name the state with the fastest year-over-year natural gas production growth, which would you guess? Since most people may not know let’s get right to the answer. It's Pennsylvania. Marketed natural gas in the Keystone State grew an eye-popping 72% from 2011 to 2012. That moved it from the seventh- to the third-largest gas-producing state in the U.S.  The state of North Dakota is now number two just behind Texas as the largest oil producer in the U.S. and has more jobs available than people to work.

  Pennsylvania's gas is coming from the Marcellus Shale deposit, which runs through the central part of the state from north to south. Production in the Marcellus began only five years ago. But now it produces about 18% of all natural gas in the U.S. The fact is, as the U.S. Energy Information Administration (EIA) reports, "Marcellus production alone accounted for 75% of all production growth over the past year in the six basins covered in EIA's recently released Drilling Productivity Report (DPR), which highlights the latest regional trends in drilling, completion, and production from gas- and oil-producing wells."

  An even more amazing fact is that if Pennsylvania's Marcellus Shale field were a country, it would be the world's eighth-largest natural gas producer. Incredibly, it now out produces Saudi Arabia. The production at Marcellus has shocked experts like Sam Gorgen of the EIA and Terry Engelder, a Penn State University geologist. Engelder, a leading researcher of the formation, predicted that Marcellus production wouldn't hit the 12 Bcf/d rate until 2015. So much for that... the Marcellus is already there. Marcellus production has already surpassed 14 billion cubic feet per day (Bcf/d).

 At present the Marcellus' production is equivalent to about 550 million barrels of oil per year. The growth rate in new-well gas production per rig continues to rise, even as exploration and production (E&P) companies drill more of them. Why is this? With each well drilled, E&P companies gain a greater understanding of the underlying geology. They combine that knowledge with continually improving fracking techniques. The result: a continual rise in well production rates.  This growth in production rates is likely to continue in the future. That will mean a faster and higher rate of return on Marcellus wells. It also means drillers can make money even with natural gas prices at today's low levels.

  We have a couple of companies that we have in our portfolio that are involved in the movement and drilling for natural gas and we will be adding two more to our portfolio for our subscribers today.  Out of consideration to our paying subscribers I’m unable to reveal their names, however, the good news for you is that they are not the only ones drilling in that area or involved in the production of natural gas.  Being that it’s in your back yard don’t miss out on a great opportunity to cash in on it.

Disclaimer:  Suburban Trader is a publisher of financial news and opinions and NOT a securities broker/dealer or an investment adviser.  You are responsible for your own investment decisions.  All information contained in our newsletters or on our web site(s) should be independently verified with the companies mentioned, and readers should always conduct their own research and due diligence.