I didn't look at the video just read your excellent explanation. In the USA some people have been confusing rig count with Shale production. It is not, there were an awful lot of start ups in the USA and a lot of those smaller firms gave gone bust. As I understand it, the actual production of Shale gas/oil is steadily increasing in the USA, and they are looking ot export some of it. I don't think it matters too much what the world price for Shale gas will be to the UK, it a strategic fuel and the UK will want to have its own home product. At the moment, because we are still in the EU, as I understand it, the government could not ease the path for Shale companies because that would infringe EU competition laws, but once we are free of the EU, they could assist Shale by maninpulating Corporation Tax, for example. I am sure that the USA would do likewise if necesary to protect their in-house supplies. Thus, in the long run it probably won't matter if oil drops to $30 pbrl, Shale will survive.
IMO the arguments that are made in the video are weak, flawed and there is a lot of outdated information on the slides.
It is my understanding that the US shale producers are generating gas at around $50 per boe as a result of the recent oil price drop, where she is talking about $62....
The "production decline curve" is an issue with all hydrocarbon extractions. On the shale front, there are new technologies out there (e.g. HNR's DT Ultravert technology), which are becoming a game changer in this area, allowing wells to flow at high rates for longer.
As to Ineos, she very correctly points out the high costs (triple) of importing US shale to the UK. But she then goes on to say that by developing UK shale (at a third of the cost of US gas), Ineos is going to go bust... Seriously... At that point I just gave up watching the rest of the presentation. If shale was that uneconomical, it would exist as an industry, even in the US.
Anyway, that is just my opinion. As always, DYOR and come up with your own conclusions. I'm happy to continue holding a few IGAS shares in my portfolio. Merchant
jcw2016 - 35% of Europe's gas comes from Russia, while 38% of the UK's gas comes from Europe.... BG link below. Gas is a traded commodity and what happens on the other side of the Northern hemisphere does affect us. Once we are out of Europe,
Why would any Russian shenanigans have an effect on us? The only gas lines that are connected to the UK are from Norway,Holland and Belgium. Norway has absolutely no connections to Russian pipelines, however, Holland and Belgium do, but Holland hasn't purchased any gas from Russia in 3 years,and as for Belgium it's 1% of their needs from Russia. Latest figures show the pencentage of gas imports from Holland and Belgium to the UK,is less than 1% of our own requirements. The UK produces over half of its gas needs from its own shores,but of course this runs out sooner or later. Till then,the majority of our imported Gas comes from the Middle East,USA,( both LNG imports ), and Norway . And the sooner we cut our Middle East ties,the better. I'd rather deal with Norway and the States for any imports we do require,with the continuation and growth of having our own independent industry.GLA. Be a while yet till the tail wags again. Long live the dead dog.
I would totally agree... Once we are out of the single market, there is a good chance that those gas pipelines from the continent will quickly become restricted, with any Russian gas market shenanigans. We all know that the UK doesn't have very much emergency gas storage capacity.
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