Shale Gas and Oil

Hydraulic fracturing (fracking) has changed the oil and gas industry forever. The technology producers to tap reserves in shale formations across the world. The oil coming out of the shale is called ‘shale oil’ or ‘tight oil’. That’s because fracking involves pumping water and chemicals to break up the rock formation. That hopefully frees the oil, where a producer can then pump it to surface.

Shale Oil in Australia

Shale oil and gas has taken off in the US. However, hydraulic fracturing hasn’t been big in Australia. There’s a lot of environmental red tape to overcome. If that ever happens, it could offer one of the most explosive investment opportunities in history. The US Energy Information Administration estimates that Australia could have up to 396 trillion cubic feet in shale gas resources. That’s equivalent to about 185 years of total Australian gas production at current rates.

Read more
US shale myths and facts
US Shale and The ‘Energy Freedom’ Myth
US shale developments have a history of exploding with production growth before rapidly drying up. Overly-optimistic oil companies are lapping up the low interest rates in the US, as it allows them to expand through increasing debt. Yet, seemingly, being positive cash flow doesn’t matter when you are ‘investing’ in the future.
Oil Spill
Houston’s Flood of Shale Oil
When the next downpour comes, you should expect a washout in Houston’s oil businesses. Marginal producers will get out. And marginal workers — attracted to Houston by the hope of higher wages — will move out.
BHP shale oil
Why BHP Is Getting Out of US Shale Oil
The cycle has clearly turned for resources, and for BHP. Clear evidence of that lies in the amount of cash the company generated. Free cash flow (cash available for reinvestment back in the business, dividends, buybacks, etc.) grew to US$12.4 billion, up from just under US$4 billion last year.
Oil and gold stock market
What the Gold-Oil Ratio Is Telling You
On Monday, BlueScope Steel Ltd [ASX:BSL] fell 21%! In one day, nearly three months’ worth of gains were wiped out.  As the old saying goes, stocks rise by the escalator and go down via the elevator.