Cheap shale gas bubble 'will burst within 2-4 years'

[phantom power]

“The bubble is a result of sweet spots running out of drilling locations at which time drilling must move to progressively lower quality portions of the ‘play’, requiring ever more wells and ever higher prices to justify them,” he said.

With the exception of the very best sweet spots, shale was “not very” profitable in Hughes’ view. His research found that large returns in the industry came from selling assets acquired at low prices early in the boom, and through joint ventures, and mergers and acquisitions.

The US shale boom then grew so fast because of ‘held-by-production’ lease commitments - sold at values of up to $25,000 an acre - which amounted to an injunction: “Drill or you lose your investment,” Hughes argued.

“After wells are drilled they are put on production to generate cash flow and maintain stock prices, even though they are unlikely to turn a profit,” he said. Some analysts estimate this production decline at between 60%-90%.

http://www.euractiv.com/energy/expert-cheap-shale-gas-bubble-bu-news-519931

[CanonRay]

1. This is what James Kunstler has been saying all along

http://kunstler.com/blog/2013/04/we-wish.html

[cprise]

2. Will be interesting to see if this plays out. n/t

[NickB79]

3. We can only hope this is true. nt

[Champion Jack]

4. +1,000

[marions ghost]

5. Let's hope so

--so misguided & stupid.