bhp and its shale

this from todays Business Spectator

it is only an extract of that part that i thought might be of interest.

imho, a coy like BPT might be of interest to the likes of BHP.

any run on BPT for its shale, surely must have implications for ICN?

cheers
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BHP's gas play ticks all the boxesStephen Bartholomeusz



The shale sector in the US is still in an early stage of development, although there is a dramatic increase in production occurring ? and an equally dramatic consolidation as the major companies rush into the sector ? that is transforming the US energy equation to the point where it may well become not just self-sufficient, but a net exporter of LNG. BHP referred today to projections that shale gas will account for about 50 per cent of US production by 2030.

Despite the environmental risks created by the 'fracking' process used to release the gas ? the injections of chemicals under pressure ? the appeal to the majors of unconventional gas is that it is relatively cheap to acquire but requires significant and continuing capital commitments to develop.

The smaller players who developed the sector have discovered that the more successful they are the more cash they need to pour into their projects to maintain their growth. Petrohawk has been forced to make more than 10 asset sales and raise more than $US3 billion of equity, and take on $US3 billion of debt, to fund the development of its core acreage.

A company like BHP, with its vast balance sheet and cash flows, is able to accelerate development. It plans to spend more than $US5 billion a year over the next decade and beyond to increase production, something a Petrohawk could never contemplate.

Unlike oil, where the price is high, gas prices in the US reflect the recessed state of its economy, which also means that rather than capitalising top-of-cycle prices BHP is, it presumably hopes, entering at the bottom of a cycle.