An article in the Toronto Globe and Mail highlights the promising future for shale oil—that’s right, shale oil. The technologies that drillers have used to unlock vast amounts of natural gas from shale are now starting to be used to unlock vast amounts of oil.
But acceleration in technologies unlocking natural gas from shale has had another derivative effect: It has also uncovered new resources for crude oil in shale thought to be also entirely irretrievable even two years ago. Oil companies are virtually falling all over themselves to drill new wells in the-formerly-thought-to-be barren fields of the Bakken in the Dakotas, the Permian basin in West Texas and in the Eagle Ford region in Central Texas, the subject of the NY Times article.
The reason for this is obvious: While natural gas hovers near multi-year lows, crude oil has exploded – still trading over $100 (U.S.) a barrel in the West Texas Intermediate contract and over $115 a barrel in the Brent contract. At those lofty numbers, shale oil is incredibly profitable.
And profits alone are not the only reason for rushing to shale oil using fracking technologies. With 3,000 new wells expected to be drilled in the next 12 months, there is the expectation of 2 million new jobs that could be created and a further hope that oil from shale will significantly increase our domestic oil supply.*
Read the rest of this intriguing article by clicking the link below. For those looking to invest, the author gives a few recommendations on which companies to invest in—companies that will likely expand quickly as more and more drilling for shale oil becomes a reality.
*Toronto Globe and Mail/TheStreet (Jun 1, 2011) – Shale oil’s promising future