Fayetteville Shale in the US - Gas Shale Market Analysis and

1. Fayetteville Shale in the US - Gas Shale Market Analysis and Forecasts to 2020

2. Fayetteville Shale will Continue to be a Major Natural Gas Producing Shale in the US Fayetteville shale, in a span of six years, has evolved as a significant onshore natural gas producing field in the US. The production from Fayetteville shale increased from 331.9 million cubic feet equivalent (MMcfe) in 2004 to 519,547.2 MMcfe in 2009, at an average annual growth rate (AAGR) of 123.3%. During 2010-2012, the production from the Fayetteville shale is expected to be low due to low natural gas prices. Post 2012, with natural gas prices expected to touch around $6 per Million British Thermal Units (MMBTU), the production from Fayetteville shale play would show an upward trend. The production in the play is expected to gradually increase, reaching 872,387.8 MMcfe by 2020. Fayetteville Shale Gas Success Mandates Infrastructure Development Previously, Arkansas State in the US had no major infrastructure due to the absence of natural gas industry in the state. However, with the discovery of Fayetteville shale in 2004, there have been continuous investments in infrastructure development. Among major infrastructure development plans in the shale play, Fayetteville Express Pipeline (FEP) is being constructed to take the gas produced in the Fayetteville shale play to the markets in the Midwest and Northeast of the US. Prior to FEP, the

3. Fayetteville and Greenville gathering lines used to collect gas from Fayetteville shale play to the markets directly and indirectly by the US’s existing interstate pipelines. For further details, please click or add the below link to your browser: http://www.globaldata.com/reportstore/Report.aspx?ID=Fayetteville-Shale-in-the-US-Gas-Shale-Market-Analysis-and-Forecasts-to-2020&ReportType=Industry_Report&coreindustry=Industry_Report&Title=Energy_and_Utilities Low Natural Gas Prices have Impacted Drilling Activities in the Fayetteville Shale Play Low international prices of natural gas since late 2008 have impacted the drilling activities in Fayetteville shale play. The number of wells drilled in Fayetteville Shale increased from 14 in 2004 to 860 in 2009, indicating increased interest of the companies in the shale play. Between 2008-2009 and 2009-2010, the growth in number of wells drilled declined to below 25% over the previous years, owing to low natural gas prices. The number of wells drilled in the shale play during January to October 2010 stood at 731.

4. Fayetteville Shale Remains an Attractive Investment Destination for Natural Gas The increasing initial production rates and Estimated Ultimate Recovery (EUR) from the Fayetteville shale play, and the decreasing cost, continue to make Fayetteville shale an attractive investment destination. Recently, Chesapeake Energy raised its EUR from Fayetteville shale from 2.4 bcfe to 2.6 bcfe. Southwestern Energy has significantly decreased its finding and development cost in the shale play; $2.05 per Mcfe in 2007 to $0.69 per Mcfe in 2009. With industry majors like BP Plc, ExxonMobil Corporation, and Chesapeake having significant acreages in the shale play and attractive overall economics, the Fayetteville shale play is expected to attract investments as the international natural gas prices rebound. Low Natural Gas Prices Prompt Oil and Gas Companies to Move towards Liquid Shale Plays The US oil and gas companies are increasingly shifting their focus to liquid rich shale plays like Bakken, Eagle Ford and emerging plays like Niobrara shale. Lower natural gas prices and increasing crude oil prices have diverted

5. investments from gas shales to the liquid rich shales. It is expected that investments in the Fayetteville play will remain low over the next two years as natural gas prices remain low. GlobalData’s new report “Fayetteville Shale in the US – Gas Shale Market Analysis and Forecasts to 2020” analyzes the recent activities in the Fayetteville shale play. The report details the operational activities in the play, analyzing drilling activities, cost trends, initial production rates and well decline curves. The research also provides information on production trends in the Fayetteville shale play, with forecasts to 2020. It analyzes the competitive landscape of the Fayetteville shale, detailing operations of the top five companies. The report highlights infrastructure details in the shale play. It also details the merger and acquisition activities in the shale play during the period 2006 to 2010. For further details, please click or add the below link to your browser: http://www.globaldata.com/reportstore/Report.aspx?ID=Fayetteville-Shale-in-the-US-Gas-Shale-Market-Analysis-and-Forecasts-to-2020&ReportType=Industry_Report&coreindustry=Industry_Report&Title=Energy_and_Utilities Visit our report store: http://www.globaldata.com

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