Cost Vs. Reward: Organic and Inorganic Unconventional-Gas Economics

This panel looks at the cost hurdles play by play, the price of acquisitions vs. drilling, and answers to takeaway gridlock.

Moderated by Nissa Darbonne, Executive Editor, Oil and Gas Investor

"Plain vanilla A&D is not functioning," says Jefferies Randall & Dewey managing director Bill Marko. "You need optimistic buyers-people who believe in $6 to $7 as the prevailing price. At $6 to $7, the shales work all day long, even without cost reductions."

"Regardless of demand, 2009 is essentially a lost cause," says Tom Gardner, a research director at Simmons & Co. International. What to do? "Stay alive until 2010-2010 is looking good."

"We've got a lot of gas, and demand is shrinking because of the recession," says Bentek Energy LLC founder and president Porter Bennett. "Thanks to unconventionals, the U.S. is supply-long and it's going to be that way for quite a while."

Even though both are tied to gas prices, shale-focused companies "tend to travel along a slightly more elevated path in the marketplace in terms of investor perceived value, but you need to be a gas-price bull to be involved in these shale names," says Jefferies & Co. managing director Subash Chandra, presenting in absentia. As an investor, "You should and need to have shale-gas exposure."

Featuring:

• U.S. Natural Gas Glut-Causes and Cures
  Thomas L. Gardner, Director, Simmons & Co. Int'l
• At What Price Unconventional Gas?
  The Cost Hurdles, Play-by-Play Subash Chandra, Managing Director, Jefferies & Company
• M&A Aspects of Shale and Tight Gas
  William A. Marko, Managing Director, Jefferies Randall & Dewey
• But, It Doesn't Go There From Here: Answers to Take-Away Gridlock
  Porter Bennett, President and CEO, Bentek Energy LLC

Total Length: 01:59:01

Included: Videos, Slides, Conference and Synopses