The Prospects for Continued Expansion of Marcellus Drilling – Some Companies Cooling on Shale Gas Drilling

Will drilling in the Marcellus Shale, or other shale plays for that matter, continue its red-hot growth? The honest answer is, who knows? It depends on whether or not it’s profitable for energy companies to continue their shale gas drilling expansion. Right now, it appears that at least some companies are leaning away from further expansion in shale gas drilling because the commodity price of natural gas is low compared with oil. Many (most?) of the companies who drill for natural gas also drill for oil. If the price you get for gas is only barely covering your costs to drill, as it is right now for natural gas, you take a close look at the alternatives, like oil.

Some of the factors that will continue to affect the price of natural gas in the coming few years, and hence drillers’ willingness to drill:

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