IHS: North American gas resource expanding

The North American natural gas resource continues to expand as breakeven development costs fall, reports IHS.

A new IHS study estimates that 1.4 quadrillion cu ft of natural gas in the US Lower 48 and Canada can be produced at a current, break-even Henry Hub gas price of $4/MMbtu or below.

That’s 66% more than the firm estimated in a study published in 2010.

About 800 tcf can be produced at a current break-even price of $3/MMbtu or less, the new study finds.

New discoveries, recent reductions in drilling and completion costs, and “major gains” in productivity are the main reasons for the expansion of potential gas supply.

Key factors in these trends, the study says, are improved understanding of subsurface geology, greater use of technology, development of specialized fracturing techniques, and emergence of new plays such as the Utica shale.

Also contributing to the gas-resource expansion is the addition to the resource base of associated gas in emerging oil-shale plays as development methods first used for gas in shale spread to oil.

IHS estimates the gas resource associated with Bakken, Eagle Ford, Permian basin, and other shale oil plays at 250 tcf.

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