|A well head|
According to the New York Times article published June 25th, the gas industry may be overstating the productivity of their wells and the size of their reserves. Are gas wells just a giant Ponzi scheme? Do the economics work? Read more...
This article is a show stopper. It brings up questions like: Do wells produce for 30-50 years? Now it looks like pure speculation. The most gas is extracted in the first year. Will lease holders experience a reversal of fortune? This is a boom-and-bust scenario. Are investors being misled? Will this end up being an Enron moment? A former Enron executive wrote in 2009 while working at an energy company:
I wonder when they will start telling people these wells are just not what they thought they were going to be?In Texas where the Barnett Shale has been drilled for ten plus years, a review of more than 9,000 wells (2003-2009) shows that less than 10% of the wells had recouped their estimated costs by the time they were seven years old.