Marcellus Shale Boom

Brian Hicks

Updated March 10, 2011

Financial crisis? Bubbles? Overvalued markets? States on the brink?


There’s a live boom happening right now, right here in the United States… And it could easily produce another surge of “overnight millionaires”.

A few years ago, we introduced you to the massive oil find known as the Bakken — that behemoth oil reserve stretching across North Dakota, Montana, and Southeastern Saskatchewan.

And it was no secret that oil rigs were not only successfully producing oil there, but rolling in green and creating a surge of patient millionaires.

Brigham (BEXP) — which ran from sub-$1 to more than $35 — is proof of that:

BEXP chart

Northern Oil & Gas (NOG), which ran from sub-$1 to more than $32 and Kodiak (KOG) — which ran from pennies on the dollar to more than $7 — are even more proof.

And it’s happening again, right now, in the Eastern United States. Only this time it’s not oil… It’s natural gas.

And folks, the natural gas bottom may be in, as majors swoop in for a piece of cheap natural gas.

And it’s only a matter of time before those same “majors” swoop into the Marcellus region to pick up natural gas land and drillers on the cheap.

The reality is there’s a lot of natural gas to be found.

Penn State geoscience professor Terry Englander believes there’s 500 trillion cubic feet of natural gas in that area. According to this report, horizontal drilling and frac methods could lead to the recovery of 50 trillion cubic feet of this energy resource.

And if that’s the case, we could be looking at a natural gas value of a trillion dollars.

Of course the big boys want a piece of the nat gas boom…

  • BHP Billiton just agreed to buy Chesapeake Energy’s Arkansas shale gas assets for $4.75 billion in cash, more than doubling its U.S. oil and gas reserves.

  • Chevron Corporation agreed to buy Atlas Energy for its piece of the Marcellus Shale.

  • Japan’s Sumitomo is even picking up land for about $140.4 million.
  • Chief Oil & Gas — owned by billionaire natural gas guru Trevor Rees-Jones — just sold part of his Marcellus property for $459 million. The buyer, EXCO Resources, gets 50,000 acres from that deal, which includes 15 producing wells. And here’s the kicker: This deal values the land around $9,200 an acre.
  • Exxon acquired XTO Energy, a shale-gas producer, for $34.8 billion back in June 2010.

  • CNOOC, China’s largest offshore energy producer, paid $570 million in cash for a third of Chesapeake’s Niobrara shale project in Colorado and Wyoming.

  • Billionaire Mukesh Ambani, chairman of Reliance Industries offered $392 million for nearly 63,000 acres controlled by Carrizo Oil & Gas in the region.

We’re talking big money here.

Like I said, it’s only a matter of time before even more majors flood the Marcellus region looking for gas on the cheap.

In fact my team and I are looking at a company digging in Marcellus as we speak — with respectable insider buying to boot. To say it’s the perfect buyout candidate is an understatement…

But don’t worry. You’ll have plenty of time to profit from it.

We’ll have a full report with all the details on this company in just a few weeks.

As for that Bakken-style boom…

Natural gas drilling will create quite a boom for Central Pennsylvania.

And that’s because there’s plenty to get excited about… The area has gone from drilling 195 wells in 2008 to more than 1,400 last year. 

And it’s likely to hit 4,000 per year once infrastructure is in place to transport the gas.

Better yet, experts are saying when all is said and done, Pennsylvania could easily sit on 75,000 to 100,000 wells — creating one of the biggest economic booms for the area since coal.

That means unemployed Pennsylvanians won’t be out of work for much longer.

And increased competition for labor is expected to drive salaries further north…

Marcellus has become a once-in-a-lifetime opportunity that could generate plenty of community investment, employment, and a greater standard of living. If drilling grows at 20% a year, the area could easily add another 20,000 jobs by 2015.

According to the area’s Chamber of Commerce, more than 50 new gas-related businesses have moved into the area: “It’s the biggest economic development story in our entire history.”

Bankers are also likely to see rapid increases in wealth, as the boom brings the potential for more deposits, lending opportunities, and close to $250 billion in royalty deposits. Northwest Bancshares (NWBI) and S&T Bancorp (STBA) are just two of the banks that could see substantial windfalls of cash if that’s the case.

What oil is to the Middle East

Investors used to tell us we were exaggerating the truth behind Bakken

But the only ones looking stupid now are those same investors that missed the Brigham-type runs we spoke of.

Local lawmakers are saying the Marcellus shale “could be to West Virginia what oil is to the Middle East,” as they set up new regulations for horizontal drilling and hydraulic fracturing in the region, and new tax break incentives for drillers.

This is gonna be big…

Stay tuned for our brand-new report on how you can get your piece of the Marcellus pie.

Stay Ahead of the Herd,

Ian L. Cooper
Editor, Wealth Daily

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