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The Shale Gas Market 2013-2023
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Contents
1. Executive Summary
1.1 Overview of the Shale Gas Market
1.2 Benefits of This Report
1.3 Who is This Report For?
1.4 Methodology
1.5 Global Shale Gas Market Forecast 2013-2023
1.6 Leading National Shale Gas Market Forecasts 2013-2023
2. Introduction to the Shale Gas Market
2.1 Global Shale Gas Resources
2.2 Global Shale Gas Market Emphasis
2.3 Global Shale Gas Economics
2.4 Current Trends in the Shale Gas Market
2.4.1 Natural Gas Prices
2.4.2 Increasing Influence of Large Multi-National Companies
2.4.3 Growing Number of Joint Ventures
2.4.4 Improving Operational Efficiency
2.4.5 Shift from Gas to Liquids
2.4.6 Hedging not Managing to Cover Losses
3. Global Shale Gas Market 2013-2023
3.1 Global Shale Gas Market Forecast 2013-2023
3.2 Global Shale Gas Market Drivers & Restraints
3.3 Emulating the US Shale Gas Revolution?
3.3.1 Geology, Industry, Regulation, Pipelines, Water, Demand, Finance
3.3.2 Shale Gas in the US-Canadian Market and the Rest of the World
4. Leading National Shale Gas Markets 2013-2023
4.1 Leading National Shale Gas Markets Forecast 2013-2023
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Contents
4.1.1 Leading National Shale Gas Markets Share Forecast 2013, 2018, 2023
4.2 Global Shale Gas Market Barriers to Entry Analysis
4.2.1 National Shale Gas Market Barriers to Entry Analysis
4.3 US Shale Gas Market Forecast 2013-2023
4.3.1 US Shale Gas Market Drivers & Restraints
4.3.2 US Shale Gas Market Analysis
4.4 Canadian Shale Gas Market Forecast 2013-2023
4.4.1 Canadian Shale Gas Market Drivers & Restraints
4.4.2 Canadian Shale Gas Market Analysis
4.5 Chinese Shale Gas Market Forecast 2013-2023
4.5.1 Chinese Shale Gas Market Drivers & Restraints
4.5.2 Chinese Shale Gas Market Analysis
4.6 Argentinean Shale Gas Market Forecast 2013-2023
4.6.1 Argentinean Shale Gas Market Drivers & Restraints
4.6.2 Argentinean Shale Gas Market Analysis
4.7 Australian Shale Gas Market Forecast 2013-2023
4.7.1 Australian Shale Gas Market Drivers & Restraints
4.7.2 Australian Shale Gas Market Analysis
4.8 Polish Shale Gas Market Forecast 2013-2023
4.8.1 Polish Shale Gas Market Drivers & Restraints
4.8.2 Polish Shale Gas Market Analysis
4.9 Mexican Shale Gas Market Forecast 2013-2023
4.9.1 Mexican Shale Gas Market Drivers & Restraints
4.9.2 Mexican Shale Gas Market Analysis
4.10 Indian Shale Gas Market Forecast 2013-2023
4.10.1 Indian Shale Gas Market Drivers & Restraints
4.10.2 Indian Shale Gas Market Analysis
4.11 Rest of the World Shale Gas Market Forecast 2013-2023
4.11.1 Rest of the World Shale Gas Market Drivers & Restraints
4.11.2 Rest of the World Shale Gas Market Analysis
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Contents
5. PEST Analysis of the Shale Gas Market 2013-2023
5.1 Political Factors
5.2 Economic Factors
5.3 Social Factors
5.4 Technological Factors
6. Leading Companies in the Shale Gas Market 6.1 Chesapeake Energy Company Profile
6.2 BHP Billiton Company Profile
6.3 ExxonMobil Company Profile
6.4 Southwestern Energy Company Profile
6.5 Royal Dutch Shell Company Profile
6.6 Antero Resources Company Profile
6.7 Range Resources Company Profile
6.8 Devon Energy Company Profile
6.9 CONSOL Energy Company Profile
6.10 EQT Corporation Company Profile
6.11 Other Leading Companies in the Shale Gas Market
7. Conclusions
7.1 Shale Gas Market Outlook
7.2 Shale Gas Market Drivers & Restraints
7.2.1 Shale Gas Market Drivers
7.2.2 Shale Gas Market Restraints
7.3 Leading National Shale Gas Market Forecasts 2013-2023
8. Glossary
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Contents
List of Tables Table 1.1 Leading National Shale Gas Market Forecasts Summary 2013, 2018, 2023 ($m, CAGR
%)
Table 3.1 Global Shale Gas Market Forecast 2013-2023 ($bn, AGR %, CAGR %, Cumulative)
Table 3.2 Global Shale Gas Market Drivers & Restraints
Table 3.3 Important Global Shale Gas Market Factors (Geology, Industry, Regulation, Demand,
Finance, Water, Pipelines)
Table 4.1 Leading National Shale Gas Markets Forecast 2013-2023 ($m, AGR %)
Table 4.2 Leading National Shale Gas Market CAGRs 2013-2018, 2018-2023, 2013-2023 (CAGR
%)
Table 4.3 Leading National Shale Gas Markets Cumulative Capital Expenditure 2013-2023 (Rank,
$bn)
Table 4.4 US Shale Gas Market Forecast 2013-2023 ($m, AGR %, CAGR%, Cumulative)
Table 4.5 US Shale Gas Market Drivers & Restraints
Table 4.6 Canadian Shale Gas Market Forecast 2013-2023 ($m, AGR %, CAGR%, Cumulative)
Table 4.7 Canadian Shale Gas Market Drivers & Restraints
Table 4.8 Chinese Shale Gas Market Forecast 2013-2023 ($m, AGR %, CAGR%, Cumulative)
Table 4.9 Chinese Shale Gas Market Drivers & Restraints
Table 4.10 Major International & Domestic Shale Gas Companies Operating in China
Table 4.11 Argentinean Shale Gas Market Forecast 2013-2023 ($m, AGR %, CAGR%,
Cumulative)
Table 4.12 Argentinean Shale Gas Market Drivers & Restraints
Table 4.13 Major International & Domestic Shale Gas Companies Operating in Argentina
Table 4.14 Australian Shale Gas Market Forecast 2013-2023 ($m, AGR %, CAGR%, Cumulative)
Table 4.15 Australian Shale Gas Market Drivers & Restraints
Table 4.16 Major International & Domestic Shale Gas Companies Operating in Australia
Table 4.17 Polish Shale Gas Market Forecast 2013-2023 ($m, AGR %, CAGR%, Cumulative)
Table 4.18 Polish Shale Gas Market Drivers & Restraints
Table 4.19 Major International & Domestic Shale Gas Companies Operating in Poland
Table 4.20 Mexican Shale Gas Market Forecast 2013-2023 ($m, AGR %, CAGR%, Cumulative)
Table 4.21 Mexican Shale Gas Market Drivers & Restraints
Table 4.22 Indian Shale Gas Market Forecast 2013-2023 ($m, AGR %, CAGR%, Cumulative)
Table 4.23 Indian Shale Gas Market Drivers & Restraints
Table 4.24 Major International & Domestic Shale Gas Companies Operating in India
Table 4.25 Rest of the World Shale Gas Market Forecast 2013-2023 ($m, AGR %, CAGR%,
Cumulative)
Table 4.26 Rest of the World Shale Gas Market Drivers & Restraints
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Contents
Table 4.27 Major International & Domestic Shale Gas Companies Operating in the Rest of the
World
Table 5.1 PEST Analysis of the Shale Gas Market 2013-2023
Table 6.1 Leading 10 Companies in the Shale Gas Market 2013 (Shale Gas Capex, Market Share
%)
Table 6.2 Chesapeake Overview (Shale Gas Capex $m, Global Market Share %, Net Income $m,
Debt $bn, HQ, Ticker, Website)
Table 6.3 BHP Billiton Overview (Shale Gas Capex $m, Global Market Share %, Net Income $m,
Debt $bn, HQ, Ticker, Website
Table 6.4 BHP Billiton Shale Gas Acreage (acres)
Table 6.5 ExxonMobil Overview (Shale Gas Capex $m, Global Market Share %, Net Income $m,
Debt $bn, HQ, Ticker, Website)
Table 6.6 ExxonMobil North American Shale Gas Acreage (acres)
Table 6.7 Southwestern Energy Overview (Shale Gas Capex $m, Global Market Share %, Net
Income $m, Debt $bn, HQ, Ticker, Website)
Table 6.8 Royal Dutch Shell Overview (Shale Gas Capex $m, Global Market Share %, Net Income
$m, Debt $bn, HQ, Ticker, Website)
Table 6.9 Shell Shale Gas Acreage (acres)
Table 6.10 Antero Resources Overview (Shale Gas Capex $m, Global Market Share %, Net
Income $m, Debt $bn, HQ, Website)
Table 6.11 Range Resources Overview (Shale Gas Capex $m, Global Market Share %, Net
Income $m, Debt $bn, HQ, Website)
Table 6.12 Devon Energy Overview (Shale Gas Capex $m, Global Market Share %, Net Income
$m, Debt $bn, HQ, Website)
Table 6.13 Devon Energy’s Shale Gas Acreage (acres)
Table 6.14 CONSOL Energy Overview (Shale Gas Capex $m, Global Market Share %, Net Income
$m, Debt $bn, HQ, Website)
Table 6.15 EQT Corporation Overview (Shale Gas Capex $m, Global Market Share %, Net Income
$m, Debt $bn, HQ, Website)
Table 6.16 Other Leading Companies in the Shale Gas Market 2013 (Company, Country)
Table 7.1 Leading National Shale Gas Market Forecasts Summary 2013, 2018, 2023 ($m), 2013-
2023 CAGR (%)
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Contents
List of Figures Figure 2.1 Regional Shale Gas Resource Estimates (tcf)
Figure 2.2 Global Distribution of Shale Gas Capital Spending 2013 (%)
Figure 2.3 Breakeven Prices for Top North American Shale Plays & Henry Hub Price ($/MMbtu)
Figure 2.4 US Spot Gas Price History with Short Term Forecast and NYMEX Futures 2012-2014
($/MMBtu)
Figure 2.5 US and European Natural Gas Price with Japanese LNG Price 2008-2012 ($/MMBtu)
Figure 2.6 US Onshore Oil and Gas Rig Count and Crude to Natural Gas Price Ratio 2000-2011
(Units & %)
Figure 2.7 US Onshore Oil and Gas Rig Count 2011-2013 (Units)
Figure 3.1 Global Shale Gas Market Forecast 2013-2023 ($bn, AGR %)
Figure 3.2 US-Canada, and Rest of the World CAGRs 2013-2023, 2013-2018, and 2018-2023 (%)
Figure 3.3 US-Canadian Shale Gas Market Forecast 2013-2023 ($m, AGR %)
Figure 3.4 Rest of the World Shale Gas Market Forecast 2013-2023 ($m, AGR %)
Figure 3.5 US-Canada, and Rest of the World Market Share 2013, 2018, 2023 (% Share)
Figure 3.6 US-Canada, and Rest of the World Market Cumulative Spending 2013-2023 (%)
Figure 4.1 Leading National Shale Gas Markets Forecast 2013-2023 ($m)
Figure 4.2 Leading National Shale Gas Markets Share Forecast 2013 (%)
Figure 4.3 Leading National Shale Gas Markets Share Forecast 2018 (%)
Figure 4.4 Leading National Shale Gas Markets Share Forecast 2023 (%)
Figure 4.5 Leading National Shale Gas Markets Share Change 2013-2023 (%)
Figure 4.6 Barriers to Entry vs. National Market Size 2013 vs. CAGR 2013-2023 ($m, CAGR%)
Figure 4.7 US Shale Gas Market Forecast 2013-2023 ($m, AGR%)
Figure 4.8 US Shale Gas Market Share Forecast 2013, 2018 and 2023 (% Share)
Figure 4.9 Henry Hub Natural Gas Price 2008-2013 ($/MMBtu)
Figure 4.10 Monthly US Shale Play Dry Gas Output 2007-2013 (Bcf/d)
Figure 4.11 Major US Shale Formation Production 2010-2013 (Bcf/d)
Figure 4.12 US Shale Gas Production by Shale Formation 2010-2013 (% Share)
Figure 4.13 Canadian Shale Gas Market Forecast 2013-2023 ($m, AGR%)
Figure 4.14 Canadian Shale Gas Market Share Forecast 2013, 2018 and 2023 (% Share)
Figure 4.15 Chinese Shale Gas Market Forecast 2013-2023 ($m, AGR%)
Figure 4.16 Chinese Shale Gas Market Share Forecast 2013, 2018 and 2023 (% Share)
Figure 4.17 Argentinean Shale Gas Market Forecast 2013-2023 ($m, AGR%)
Figure 4.18 Argentinean Shale Gas Market Share Forecast 2013, 2018 and 2023 (% Share)
Figure 4.19 Australian Shale Gas Market Forecast 2013-2023 ($m, AGR%)
Figure 4.20 Australian Shale Gas Market Share Forecast 2013, 2018 and 2023 (% Share)
Figure 4.21 Polish Shale Gas Market Forecast 2013-2023 ($m, AGR%)
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Figure 4.22 Polish Shale Gas Market Share Forecast 2013, 2018 and 2023 (% Share)
Figure 4.23 Mexican Shale Gas Market Forecast 2013-2023 ($m, AGR%)
Figure 4.24 Mexican Shale Gas Market Share Forecast 2013, 2018 and 2023 (% Share)
Figure 4.25 Indian Shale Gas Market Forecast 2013-2023 ($m, AGR%)
Figure 4.26 Indian Shale Gas Market Share Forecast 2013, 2018 and 2023 (% Share)
Figure 4.27 Rest of the World Shale Gas Market Forecast 2013-2023 ($m, AGR%)
Figure 4.28 Rest of the World Shale Gas Market Share Forecast 2013, 2018 and 2023 (% Share)
Figure 6.1 Leading 10 Companies in the Shale Gas Market Share 2013 (% share)
Figure 7.1 Global Shale Gas Market Forecast 2013-2023 ($m, AGR %)
Figure 7.2 National Shale Gas Markets CAGR 2013-2018, 2018-2023, 2013-2023 (%)
Figure 7.3 Leading National Shale Gas Markets Share Forecast 2013 (%)
Figure 7.4 Leading National Shale Gas Markets Share Forecast 2023 (%)
Figure 7.5 National Shale Gas Markets Cumulative Capital Expenditure 2013-2023 (%)
Companies Mentioned in This Report 3Legs Resources
Americas Petrogas
Anadarko Petroleum
Antero Resources
Apache Energy
Atlas Energy
Baker Hughes
Beach Energy
BG Group
BHP Billiton
BNK Petroleum Reliance Industries
Bridas Corporation
Buru Energy
Cabot Oil & Gas
Cairn India
Carrizo Oil & Gas
Chesapeake Energy
Chevron Corporation
China National Offshore Oil Corporation (CNOOC)
China National Petroleum Corporation (CNPC)
ConocoPhillips
CONSOL Energy
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Contents
Cuadrilla
Devon Energy
Drillsearch
Encana Corporation
ENI S.p.A.
EOG Resources
EQT Corporation
ExxonMobil
FX Energy
GAIL India Limited
Gas Plus International B.V.
Huaying Shanxi Energy Investment Co Ltd
Igas
Korea Gas Corporation (Kogas)
LNG Canada
Marathon Oil
Mitsubishi
New Standard Energy
Noble Energy
Oil and Natural Gas Corporation Limited (ONGC)
Orlen Upstream
Pemex (Petroleos Mexicanos)
Pertamina
PetroChina
Petrohawk
PKN Orlen Upstream
Plains Exploration & Production Company
Polskie Gornictwo Naftowe i Gazownictwo SA (PGNIG)
Range Resources
Reliance Industries
Repsol
Royal Dutch Shell
San Leon Energy
Santos
Sasol
Saudi Aramco
Schlumberger
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Shaanxi Yanchang Petroleum Group
Sinopec
SM Energy
Southwestern Energy
Statoil
Talisman Energy
Total S.A.
Ultra Petroleum
Warburg Pincus LLC
WPX Energy
XTO Energy
Yacimientos Petrolíferos Fiscales (YPF)
Yanchang Petroleum
Government Agencies and Other Organisations Mentioned in This Report China’s Ministry of Land and Resources
Chinese National Energy Administration
Department of Energy and Climate Change (DECC)
Energy Information Administration (EIA)
Institute of Directors
Polish Environment Ministry
United States Geological Survey (USGS)
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The Shale Gas Market 2013-2023 2.4 Current Trends in the Shale Gas Market
2.4.1 Natural Gas Prices
North America
As mentioned in section 2.3, natural gas prices in North America, where all commercial shale gas
production currently resides, are slowly recovering from a ten year low. The low gas price of the
last two years has been inhibiting development of a number of shale gas plays as it has dipped
under the break even point of the dry gas plays (Figure 2.3). The substantial drop in the natural gas
price throughout the second half of 2011 and the first half of 2012 has made a number of dry gas
developments uneconomical, and a number of companies have suspended or slowed drilling
operations. In the majority of cases, the shale gas industry will need gas prices of over
$4.50MMbtu in order to break even on dry gas plays. The EIA’s latest short term gas price forecast
does not envisage this to happen in the next 18 months if the traditional rise in prices during the
winter season is discounted, see Figure 2.4.
There is however some positive news with many market indicators pointing towards a rise in the
price of natural gas. Firstly, the main cause of the low gas price is related to the glut of the resource
in the US and its lack of ability to export excess gas. Typical production decline from new wells can
be as much as 60% from the first year, so if there is a significant curbing of drilling it shouldn’t take
too long for supply and demand to balance. That being said natural gas storage levels remain close
to capacity and releasing some of this gas will slow the process somewhat.
0
1
2
3
4
5
$/M
MB
tu
Historical spot price STEO forecast price NYMEX futures price
Source: EIA – Short Term Energy Outlook April 2013
Figure 2.4 US Spot Gas Price History with Short Term Forecast and NYMEX Futures 2012-2014 ($/MMBtu)
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The Shale Gas Market 2013-2023 4.7.1 Australian Shale Gas Market Drivers & Restraints Table 4.15 summarises the main market drivers and restraints that will influence the Australian
shale gas market over the next decade.
Drivers Restraints • Low Cost Acreage: In comparison to
the US where deals for over $25,000
per acre have been made, Australian
shale exploration acreage is very low
cost where prices of around $100 per
acre have been seen. The industry is
still young and unproven however the
potential is vast and larger oil and gas
companies, such as BG Group,
ConocoPhillips, Chevron and Statoil
have moved in.
• Asian Gas Demand: There is a
growing demand for natural gas in a
number of Asian economies. Both
China and India are increasing their
LNG import capabilities while Korea
and Japan are also very large
importers of LNG. In these markets
Australia can compete with other
leading LNG exporters such as Qatar,
Indonesia and Malaysia.
• Growing Domestic Market:
Australia’s natural gas demand
increased around 43% from 2000-
2010 and is continuing to show signs
of growth. Australia still heavily relies
on coal for the vast majority of its
electricity production and has the
possibility to turn to natural gas in
order to reduce carbon intensity.
• Lack of Shale Gas Services:
Although Australia is a leader in
developing unconventional gas such
as coalbed methane (CBM) the
country lacks the vital services
required for developing shale gas.
There are a growing number of
horizontal drilling and fracture
stimulation companies in Australia,
especially in the areas where CBM has
been developed. However, currently
these companies will not have enough
equipment and manpower to rapidly
develop shale gas acreage into
producing fields. Commercial
production of Australian shale gas is
therefore some way off.
• LNG Export Projects: Currently
Australia is undertaking a number of
major LNG projects both onshore and
offshore that are likely to add over
50mtpa of LNG export capacity by
2017. The gas feedstock for all the
projects has already been selected
and integrated into calculations of the
economical viability of each project.
Therefore the development of more
capital intensive shale gas resources
is somewhat superfluous. It is clear
that demand for LNG is rising fast,
Table 4.15 Australian Shale Gas Market Drivers & Restraints
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The Shale Gas Market 2013-2023 4.8 Polish Shale Gas Market Forecast 2013-2023 Table 4.17, Figures 4.21 and 4.22 show visiongain’s forecast for the Polish shale gas market over
the next ten years.
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2013-23
Capex $m 460 495 673 895 1,055 1,272 1,562 1,870 2,100 2,352 2,552 2,740 17,565
AGR (%) 7.6 36.0 33.0 17.8 20.6 22.8 19.7 12.3 12.0 8.5 7.4
2018-23 11.9
18.7
25.8CAGR (%) 2013-18
CAGR (%) 2013-23
0%
5%
10%
15%
20%
25%
30%
35%
40%
0
500
1,000
1,500
2,000
2,500
3,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
AG
R
Cap
ex $
m
Year
Source: Visiongain 2013
Source: Visiongain 2013
Figure 4.21 Polish Shale Gas Market Forecast 2013-2023 ($m, AGR%)
Table 4.17 Polish Shale Gas Market Forecast 2013-2023 ($m, AGR %, CAGR%, Cumulative)
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The Shale Gas Market 2013-2023 6.1 Chesapeake Energy Company Profile
2013 Total Capital Expenditure $6.4bn Capital Expenditure in this market $3,720m Global market share % 11.2% Revenue (2012) $12.3bn Net Income (2012) -$769m Long Term Debt $bn (2012) $12.1bn Enterprise Value (06.06.13) $30.8bn Headquarters Oklahoma City, OK, USA Ticker CHK Website http://www.chk.com
Chesapeake is the number two gas producing company in the US, only surpassed by the largest oil
and gas company in the world, ExxonMobil. In 2012 the company produced 1.1tcf, had 196tcf of
proved reserves and was one of the largest shale gas developers in the world with over 3.6 million
net shale acres in its North American gas portfolio and a total of 14 million net acres of exploration
and production leasehold in the United States. Chesapeake is partnered with Statoil (32.5%) in its
Marcellus holdings, Plains Exploration & Production Company (20%) in Haynesville, Total (25%) in
Barnett and CNOOC (33.3%) in Pearsall and Eagle Ford. In 2012, Total purchased a 25% stake in
619,000 acres of Chesapeake’s Utica Shale.
Due to its problematic financial situation which saw the company facing a $10bn funding gap
Chesapeake has been selling of parts of its North American assets over the past year. In 2012 the
company sold assets worth $6.9bn, including the sale of most of its assets in the Permian Basin to
Royal Dutch Shell Plc and Chevron Corp as well as nearly all of its infrastructure network in the
region. The company still faces a funding gap of around $3.5bn for 2013 and has continued to sell
off E&P acreage and midstream assets to raise a total $7bn this year. In the first quarter of 2013
alone Chesapeake sold assets worth $2.3bn. Among the deals in 2013 were several involving high
quality shale gas acreage. In April 2013, Southwestern Energy agreed to acquire approximately
162,000 net acres of leasehold in Northeast Pennsylvania prospective for the Marcellus Shale from
Chesapeake and Statoil for approximately $93 million. The acreage is located in Susquehanna,
Wyoming, Tioga and Sullivan counties. The land is mostly undeveloped with current net production
Source: Visiongain 2013
Table 6.2 Chesapeake Overview (Shale Gas Capex $m, Global Market Share %, Net Income $m, Debt $bn, HQ, Ticker, Website)