ExxonMobil Plans
In its recent investor presentation, ExxonMobil announced plans to double US unconventional gas production by 2010 compared to the pro forma combined volumes of ExxonMobil and XTO in 2010. This translates into a roughly 3 bcf/d increase in gas volumes from unconventional US sources.
The implied 7% CAGR in unconventional gas supplies from ExxonMobil is essentially derived entirely from shale gas with tight gas and CBM expected to remain relatively unchanged.
The significance of these plans with respect to the future role of North America in the ExxonMobil portfolio is further magnified by company expectations that heavy oil and oil sands output will nearly triple by 2010 to roughly 600 Mb/d. This growth is driven by planned increases in oil sands with other heavy oil volumes remaining essentially unchanged.
BP Results in 2010
Based on results reported in its just released 20-F output from BP's unconventional gas operations shows a mixed bag:
- Rocky Mountain volumes are down significantly including in the San Juan Basin, Wamsutter and Jonah areas of operations
- Central Arkoma basin output is also down in each of the last two years
This is partially offset by rising production volumes from the Woodford shale assets acquired from Chesapeake and from the Fayetteville shale JV alliance with Chesapeake. Operations in both of these areas are generally consistent with results projected from our drilling program models.
In Wamsutter and Jonah the production decline in 2010 is a one year event. In 2009 production from both areas was up although only modestly. The declines in these two areas and in Wamsutter reflect what we believe is a likely decision to restrict prior investment plans due to low US natural gas prices, especially in these Rocky Mountain asset areas. For example, in 2005 the company announced plans to increase Wamsutter production from 125 to 250 mmcf/d before 2010. Actual net gas output peaked in 2009 at 146 mmcf/d but fell in 2010 to 126 mmcf/d.
Private Equity Capital Funding Unconventional Resources
In another sign that capital is continuing to flow into unconventional resources despite current gas prices, Alta Resources (a private company with operations in the Marcellus shale) and Blackstone have reached agreement on a US$1 billion deal. Under this agreement, the companies will acquire and develop unconventional oil and gas resources in North America. The companies will conduct the activities through Alta Energy Partners.
The President of Alta Resources noted that the deal will make Alta Energy Partners a "partner of choice for companies seeking joint ventures or exits for their shale oil and gas assets."