Lots of folks don't want unconventional hydrocarbons to be viable in the US, for any number of reasons. Art Berman is the most popular skeptic and is a popular speaker on the Peak Oil circuit. I just wanted to show you some simple illustrations that deconstruct his major argument.
First, he has run economic analyses on various shale wells and says the average production is below economic breakeven, so the whole thing is a scam perpetrated on the investing public. A cartoon of this kind of analysis is shown below.
And we see that they are. This, again, is typical in most plays. Operators get better at recovering the hydrocarbons under the lands they own. Call it a "Learning Curve". They all have it. What happens when you run an "average type curve" by operator? You see, as shown below, that a small minority might be producing economic hydrocarbons. This will typically be misidentified as geological "sweet spots", which do exist. This still drives the conclusion that "this play is uneconomic. Only a couple of guys in sweetspots will make money". But what about what we saw vis a vis operators producing more every year? Is the forward prediction correct that this play is Uneconomic based on these averages?
The answer, of course, is "Of Course Not". From a predictive point of view 40% of the companies are currently economically producing and another 20% will join the ranks next year... thus a majority of the operators are producing economically.
These numbers are cartoons of what is happening in virtually all unconventional plays SAVE the Cotton Valley. This is the reason to be excited. If you can't help yourself, and insist on gloom and doom, the answer for you is to NOT invest in these companies! That keeps the price lower for those of us that let the data really talk....
Congratulations to Bud and the other good folk at Brigham on their sale to Statoil. I understand Norwegian is a bitch of a language!