Home » Energy » Shale gas revolution did not last long for BHP – the Fayetteville story

Olduvai
Click on image to purchase

Olduvai III: Catacylsm
Click on image to purchase

Post categories

Shale gas revolution did not last long for BHP – the Fayetteville story

Shale gas revolution did not last long for BHP – the Fayetteville story

BHP_ready_goodbye_US-shalehttp://www.naturalgasintel.com/topics/101-fayetteville-shale

We had these headlines a couple of months ago:

BHP’s $50 billion shale oil blunder

23/8/2017
BHP slapped $US4.75 billion ($6 billion) down on the table to buy the rights from Chesapeake Energy to around half-a-million acres of prospective shale gas reserves at Lafayette in Arkansas.
http://www.abc.net.au/news/2017-08-23/bhp-billion-dollar-shale-oil-blunder/8832698

‘They went too hard’ – BHP’s retreat wins plaudits

22/8/2017
Mr Mackenzie conceded BHP’s entry into the onshore US shale industry was “poorly timed, we paid too much” for the assets.
“We would like to get on with the exit from shale,” he said, adding that BHP would “be patient to make sure we restore value for shareholders”.
http://www.smh.com.au/business/mining-and-resources/they-went-too-hard–bhps-retreat-wins-plaudits-20170822-gy1jfq.html

This post’s focus is the Fayetteville shale gas in the US State of Arkansas. The following map is from a BHP investor presentation in February 2011, shortly before BHP bought shale gas acreage from Chesapeake in March 2011.

Fayetteville_map_2011Fig 1: Location of the Fayetteville shale

http://www.bhp.com/media-and-insights/news-releases/2011/02/bhp-billiton-announces-acquisition-of-chesapeake-energy-corporations-fayetteville-usa-shale-assets

Let’s hit the road, on route 65 from Conway (Arkansas) towards Greenbrier where many new subdivisions were built like this one:

Let’s hit the road, on route 65 from Conway (Arkansas) towards Greenbrier where many new subdivisions were built like this one:

Greenbrier_subdivisionFig 2: Testifying to the newly found wealth – as long as it lasts.

You can buy 5 acre lots for US$ 80,000 and the average house costs just 140 grand.

5 kms north of Greenbrier we find BHP gas well Fielder 8-13 2-33H, carved out of a forest lot.

BHP_permit_41740Fig 3: BHP gas wells in Fayetteville

BHP_Fayetteville_well_locations

Fig 4: BHP well locations in Fayetteville

The production history shows that BHP went into shale just 1 ½ years before the whole basin started to peak:

Fayetteville_shale_gas_production_2004-Jul2017Fig 5: Fayetteville shale gas production up to July 2017
https://www.eia.gov/tools/faqs/faq.php?id=907&t=8

An undulating peak of production is clearly visible between mid 2012 and mid 2014

…click on the above link to read the rest of the article…

Olduvai IV: Courage
In progress...

Olduvai II: Exodus
Click on image to purchase