Shale Gas 2013

14
©notice This material is copyright 2010 by visiongain. It is against the law to reproduce any of this material without the prior written agreement of visiongain. You cannot photocopy, fax, download to database or duplicate in any other way any of the material contained in this report. Each purchase and single copy is for personal use only. The Shale Gas Market 2013-2023

Transcript of Shale Gas 2013

©noticeThis material is copyright 2010 by visiongain. It is against the law to reproduce any of this material without the prior written agreement of visiongain. You cannot photocopy, fax, download to database or duplicate in any other way any of the material contained in this report. Each purchase and single copy is for personal use only.

The Shale Gas Market 2013-2023

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Contents

1. Executive Summary

1.1 Overview of the Shale Gas Market

1.2 Benefits of This Report

1.3 Who is This Report For?

1.4 Methodology

1.5 Global Shale Gas Market Forecast 2013-2023

1.6 Leading National Shale Gas Market Forecasts 2013-2023

2. Introduction to the Shale Gas Market

2.1 Global Shale Gas Resources

2.2 Global Shale Gas Market Emphasis

2.3 Global Shale Gas Economics

2.4 Current Trends in the Shale Gas Market

2.4.1 Natural Gas Prices

2.4.2 Increasing Influence of Large Multi-National Companies

2.4.3 Growing Number of Joint Ventures

2.4.4 Improving Operational Efficiency

2.4.5 Shift from Gas to Liquids

2.4.6 Hedging not Managing to Cover Losses

3. Global Shale Gas Market 2013-2023

3.1 Global Shale Gas Market Forecast 2013-2023

3.2 Global Shale Gas Market Drivers & Restraints

3.3 Emulating the US Shale Gas Revolution?

3.3.1 Geology, Industry, Regulation, Pipelines, Water, Demand, Finance

3.3.2 Shale Gas in the US-Canadian Market and the Rest of the World

4. Leading National Shale Gas Markets 2013-2023

4.1 Leading National Shale Gas Markets Forecast 2013-2023

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Contents

4.1.1 Leading National Shale Gas Markets Share Forecast 2013, 2018, 2023

4.2 Global Shale Gas Market Barriers to Entry Analysis

4.2.1 National Shale Gas Market Barriers to Entry Analysis

4.3 US Shale Gas Market Forecast 2013-2023

4.3.1 US Shale Gas Market Drivers & Restraints

4.3.2 US Shale Gas Market Analysis

4.4 Canadian Shale Gas Market Forecast 2013-2023

4.4.1 Canadian Shale Gas Market Drivers & Restraints

4.4.2 Canadian Shale Gas Market Analysis

4.5 Chinese Shale Gas Market Forecast 2013-2023

4.5.1 Chinese Shale Gas Market Drivers & Restraints

4.5.2 Chinese Shale Gas Market Analysis

4.6 Argentinean Shale Gas Market Forecast 2013-2023

4.6.1 Argentinean Shale Gas Market Drivers & Restraints

4.6.2 Argentinean Shale Gas Market Analysis

4.7 Australian Shale Gas Market Forecast 2013-2023

4.7.1 Australian Shale Gas Market Drivers & Restraints

4.7.2 Australian Shale Gas Market Analysis

4.8 Polish Shale Gas Market Forecast 2013-2023

4.8.1 Polish Shale Gas Market Drivers & Restraints

4.8.2 Polish Shale Gas Market Analysis

4.9 Mexican Shale Gas Market Forecast 2013-2023

4.9.1 Mexican Shale Gas Market Drivers & Restraints

4.9.2 Mexican Shale Gas Market Analysis

4.10 Indian Shale Gas Market Forecast 2013-2023

4.10.1 Indian Shale Gas Market Drivers & Restraints

4.10.2 Indian Shale Gas Market Analysis

4.11 Rest of the World Shale Gas Market Forecast 2013-2023

4.11.1 Rest of the World Shale Gas Market Drivers & Restraints

4.11.2 Rest of the World Shale Gas Market Analysis

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Contents

5. PEST Analysis of the Shale Gas Market 2013-2023

5.1 Political Factors

5.2 Economic Factors

5.3 Social Factors

5.4 Technological Factors

6. Leading Companies in the Shale Gas Market 6.1 Chesapeake Energy Company Profile

6.2 BHP Billiton Company Profile

6.3 ExxonMobil Company Profile

6.4 Southwestern Energy Company Profile

6.5 Royal Dutch Shell Company Profile

6.6 Antero Resources Company Profile

6.7 Range Resources Company Profile

6.8 Devon Energy Company Profile

6.9 CONSOL Energy Company Profile

6.10 EQT Corporation Company Profile

6.11 Other Leading Companies in the Shale Gas Market

7. Conclusions

7.1 Shale Gas Market Outlook

7.2 Shale Gas Market Drivers & Restraints

7.2.1 Shale Gas Market Drivers

7.2.2 Shale Gas Market Restraints

7.3 Leading National Shale Gas Market Forecasts 2013-2023

8. Glossary

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Contents

List of Tables Table 1.1 Leading National Shale Gas Market Forecasts Summary 2013, 2018, 2023 ($m, CAGR

%)

Table 3.1 Global Shale Gas Market Forecast 2013-2023 ($bn, AGR %, CAGR %, Cumulative)

Table 3.2 Global Shale Gas Market Drivers & Restraints

Table 3.3 Important Global Shale Gas Market Factors (Geology, Industry, Regulation, Demand,

Finance, Water, Pipelines)

Table 4.1 Leading National Shale Gas Markets Forecast 2013-2023 ($m, AGR %)

Table 4.2 Leading National Shale Gas Market CAGRs 2013-2018, 2018-2023, 2013-2023 (CAGR

%)

Table 4.3 Leading National Shale Gas Markets Cumulative Capital Expenditure 2013-2023 (Rank,

$bn)

Table 4.4 US Shale Gas Market Forecast 2013-2023 ($m, AGR %, CAGR%, Cumulative)

Table 4.5 US Shale Gas Market Drivers & Restraints

Table 4.6 Canadian Shale Gas Market Forecast 2013-2023 ($m, AGR %, CAGR%, Cumulative)

Table 4.7 Canadian Shale Gas Market Drivers & Restraints

Table 4.8 Chinese Shale Gas Market Forecast 2013-2023 ($m, AGR %, CAGR%, Cumulative)

Table 4.9 Chinese Shale Gas Market Drivers & Restraints

Table 4.10 Major International & Domestic Shale Gas Companies Operating in China

Table 4.11 Argentinean Shale Gas Market Forecast 2013-2023 ($m, AGR %, CAGR%,

Cumulative)

Table 4.12 Argentinean Shale Gas Market Drivers & Restraints

Table 4.13 Major International & Domestic Shale Gas Companies Operating in Argentina

Table 4.14 Australian Shale Gas Market Forecast 2013-2023 ($m, AGR %, CAGR%, Cumulative)

Table 4.15 Australian Shale Gas Market Drivers & Restraints

Table 4.16 Major International & Domestic Shale Gas Companies Operating in Australia

Table 4.17 Polish Shale Gas Market Forecast 2013-2023 ($m, AGR %, CAGR%, Cumulative)

Table 4.18 Polish Shale Gas Market Drivers & Restraints

Table 4.19 Major International & Domestic Shale Gas Companies Operating in Poland

Table 4.20 Mexican Shale Gas Market Forecast 2013-2023 ($m, AGR %, CAGR%, Cumulative)

Table 4.21 Mexican Shale Gas Market Drivers & Restraints

Table 4.22 Indian Shale Gas Market Forecast 2013-2023 ($m, AGR %, CAGR%, Cumulative)

Table 4.23 Indian Shale Gas Market Drivers & Restraints

Table 4.24 Major International & Domestic Shale Gas Companies Operating in India

Table 4.25 Rest of the World Shale Gas Market Forecast 2013-2023 ($m, AGR %, CAGR%,

Cumulative)

Table 4.26 Rest of the World Shale Gas Market Drivers & Restraints

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Contents

Table 4.27 Major International & Domestic Shale Gas Companies Operating in the Rest of the

World

Table 5.1 PEST Analysis of the Shale Gas Market 2013-2023

Table 6.1 Leading 10 Companies in the Shale Gas Market 2013 (Shale Gas Capex, Market Share

%)

Table 6.2 Chesapeake Overview (Shale Gas Capex $m, Global Market Share %, Net Income $m,

Debt $bn, HQ, Ticker, Website)

Table 6.3 BHP Billiton Overview (Shale Gas Capex $m, Global Market Share %, Net Income $m,

Debt $bn, HQ, Ticker, Website

Table 6.4 BHP Billiton Shale Gas Acreage (acres)

Table 6.5 ExxonMobil Overview (Shale Gas Capex $m, Global Market Share %, Net Income $m,

Debt $bn, HQ, Ticker, Website)

Table 6.6 ExxonMobil North American Shale Gas Acreage (acres)

Table 6.7 Southwestern Energy Overview (Shale Gas Capex $m, Global Market Share %, Net

Income $m, Debt $bn, HQ, Ticker, Website)

Table 6.8 Royal Dutch Shell Overview (Shale Gas Capex $m, Global Market Share %, Net Income

$m, Debt $bn, HQ, Ticker, Website)

Table 6.9 Shell Shale Gas Acreage (acres)

Table 6.10 Antero Resources Overview (Shale Gas Capex $m, Global Market Share %, Net

Income $m, Debt $bn, HQ, Website)

Table 6.11 Range Resources Overview (Shale Gas Capex $m, Global Market Share %, Net

Income $m, Debt $bn, HQ, Website)

Table 6.12 Devon Energy Overview (Shale Gas Capex $m, Global Market Share %, Net Income

$m, Debt $bn, HQ, Website)

Table 6.13 Devon Energy’s Shale Gas Acreage (acres)

Table 6.14 CONSOL Energy Overview (Shale Gas Capex $m, Global Market Share %, Net Income

$m, Debt $bn, HQ, Website)

Table 6.15 EQT Corporation Overview (Shale Gas Capex $m, Global Market Share %, Net Income

$m, Debt $bn, HQ, Website)

Table 6.16 Other Leading Companies in the Shale Gas Market 2013 (Company, Country)

Table 7.1 Leading National Shale Gas Market Forecasts Summary 2013, 2018, 2023 ($m), 2013-

2023 CAGR (%)

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Contents

List of Figures Figure 2.1 Regional Shale Gas Resource Estimates (tcf)

Figure 2.2 Global Distribution of Shale Gas Capital Spending 2013 (%)

Figure 2.3 Breakeven Prices for Top North American Shale Plays & Henry Hub Price ($/MMbtu)

Figure 2.4 US Spot Gas Price History with Short Term Forecast and NYMEX Futures 2012-2014

($/MMBtu)

Figure 2.5 US and European Natural Gas Price with Japanese LNG Price 2008-2012 ($/MMBtu)

Figure 2.6 US Onshore Oil and Gas Rig Count and Crude to Natural Gas Price Ratio 2000-2011

(Units & %)

Figure 2.7 US Onshore Oil and Gas Rig Count 2011-2013 (Units)

Figure 3.1 Global Shale Gas Market Forecast 2013-2023 ($bn, AGR %)

Figure 3.2 US-Canada, and Rest of the World CAGRs 2013-2023, 2013-2018, and 2018-2023 (%)

Figure 3.3 US-Canadian Shale Gas Market Forecast 2013-2023 ($m, AGR %)

Figure 3.4 Rest of the World Shale Gas Market Forecast 2013-2023 ($m, AGR %)

Figure 3.5 US-Canada, and Rest of the World Market Share 2013, 2018, 2023 (% Share)

Figure 3.6 US-Canada, and Rest of the World Market Cumulative Spending 2013-2023 (%)

Figure 4.1 Leading National Shale Gas Markets Forecast 2013-2023 ($m)

Figure 4.2 Leading National Shale Gas Markets Share Forecast 2013 (%)

Figure 4.3 Leading National Shale Gas Markets Share Forecast 2018 (%)

Figure 4.4 Leading National Shale Gas Markets Share Forecast 2023 (%)

Figure 4.5 Leading National Shale Gas Markets Share Change 2013-2023 (%)

Figure 4.6 Barriers to Entry vs. National Market Size 2013 vs. CAGR 2013-2023 ($m, CAGR%)

Figure 4.7 US Shale Gas Market Forecast 2013-2023 ($m, AGR%)

Figure 4.8 US Shale Gas Market Share Forecast 2013, 2018 and 2023 (% Share)

Figure 4.9 Henry Hub Natural Gas Price 2008-2013 ($/MMBtu)

Figure 4.10 Monthly US Shale Play Dry Gas Output 2007-2013 (Bcf/d)

Figure 4.11 Major US Shale Formation Production 2010-2013 (Bcf/d)

Figure 4.12 US Shale Gas Production by Shale Formation 2010-2013 (% Share)

Figure 4.13 Canadian Shale Gas Market Forecast 2013-2023 ($m, AGR%)

Figure 4.14 Canadian Shale Gas Market Share Forecast 2013, 2018 and 2023 (% Share)

Figure 4.15 Chinese Shale Gas Market Forecast 2013-2023 ($m, AGR%)

Figure 4.16 Chinese Shale Gas Market Share Forecast 2013, 2018 and 2023 (% Share)

Figure 4.17 Argentinean Shale Gas Market Forecast 2013-2023 ($m, AGR%)

Figure 4.18 Argentinean Shale Gas Market Share Forecast 2013, 2018 and 2023 (% Share)

Figure 4.19 Australian Shale Gas Market Forecast 2013-2023 ($m, AGR%)

Figure 4.20 Australian Shale Gas Market Share Forecast 2013, 2018 and 2023 (% Share)

Figure 4.21 Polish Shale Gas Market Forecast 2013-2023 ($m, AGR%)

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Figure 4.22 Polish Shale Gas Market Share Forecast 2013, 2018 and 2023 (% Share)

Figure 4.23 Mexican Shale Gas Market Forecast 2013-2023 ($m, AGR%)

Figure 4.24 Mexican Shale Gas Market Share Forecast 2013, 2018 and 2023 (% Share)

Figure 4.25 Indian Shale Gas Market Forecast 2013-2023 ($m, AGR%)

Figure 4.26 Indian Shale Gas Market Share Forecast 2013, 2018 and 2023 (% Share)

Figure 4.27 Rest of the World Shale Gas Market Forecast 2013-2023 ($m, AGR%)

Figure 4.28 Rest of the World Shale Gas Market Share Forecast 2013, 2018 and 2023 (% Share)

Figure 6.1 Leading 10 Companies in the Shale Gas Market Share 2013 (% share)

Figure 7.1 Global Shale Gas Market Forecast 2013-2023 ($m, AGR %)

Figure 7.2 National Shale Gas Markets CAGR 2013-2018, 2018-2023, 2013-2023 (%)

Figure 7.3 Leading National Shale Gas Markets Share Forecast 2013 (%)

Figure 7.4 Leading National Shale Gas Markets Share Forecast 2023 (%)

Figure 7.5 National Shale Gas Markets Cumulative Capital Expenditure 2013-2023 (%)

Companies Mentioned in This Report 3Legs Resources

Americas Petrogas

Anadarko Petroleum

Antero Resources

Apache Energy

Atlas Energy

Baker Hughes

Beach Energy

BG Group

BHP Billiton

BNK Petroleum Reliance Industries

Bridas Corporation

Buru Energy

Cabot Oil & Gas

Cairn India

Carrizo Oil & Gas

Chesapeake Energy

Chevron Corporation

China National Offshore Oil Corporation (CNOOC)

China National Petroleum Corporation (CNPC)

ConocoPhillips

CONSOL Energy

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Cuadrilla

Devon Energy

Drillsearch

Encana Corporation

ENI S.p.A.

EOG Resources

EQT Corporation

ExxonMobil

FX Energy

GAIL India Limited

Gas Plus International B.V.

Huaying Shanxi Energy Investment Co Ltd

Igas

Korea Gas Corporation (Kogas)

LNG Canada

Marathon Oil

Mitsubishi

New Standard Energy

Noble Energy

Oil and Natural Gas Corporation Limited (ONGC)

Orlen Upstream

Pemex (Petroleos Mexicanos)

Pertamina

PetroChina

Petrohawk

PKN Orlen Upstream

Plains Exploration & Production Company

Polskie Gornictwo Naftowe i Gazownictwo SA (PGNIG)

Range Resources

Reliance Industries

Repsol

Royal Dutch Shell

San Leon Energy

Santos

Sasol

Saudi Aramco

Schlumberger

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Shaanxi Yanchang Petroleum Group

Sinopec

SM Energy

Southwestern Energy

Statoil

Talisman Energy

Total S.A.

Ultra Petroleum

Warburg Pincus LLC

WPX Energy

XTO Energy

Yacimientos Petrolíferos Fiscales (YPF)

Yanchang Petroleum

Government Agencies and Other Organisations Mentioned in This Report China’s Ministry of Land and Resources

Chinese National Energy Administration

Department of Energy and Climate Change (DECC)

Energy Information Administration (EIA)

Institute of Directors

Polish Environment Ministry

United States Geological Survey (USGS)

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The Shale Gas Market 2013-2023 2.4 Current Trends in the Shale Gas Market

2.4.1 Natural Gas Prices

North America

As mentioned in section 2.3, natural gas prices in North America, where all commercial shale gas

production currently resides, are slowly recovering from a ten year low. The low gas price of the

last two years has been inhibiting development of a number of shale gas plays as it has dipped

under the break even point of the dry gas plays (Figure 2.3). The substantial drop in the natural gas

price throughout the second half of 2011 and the first half of 2012 has made a number of dry gas

developments uneconomical, and a number of companies have suspended or slowed drilling

operations. In the majority of cases, the shale gas industry will need gas prices of over

$4.50MMbtu in order to break even on dry gas plays. The EIA’s latest short term gas price forecast

does not envisage this to happen in the next 18 months if the traditional rise in prices during the

winter season is discounted, see Figure 2.4.

There is however some positive news with many market indicators pointing towards a rise in the

price of natural gas. Firstly, the main cause of the low gas price is related to the glut of the resource

in the US and its lack of ability to export excess gas. Typical production decline from new wells can

be as much as 60% from the first year, so if there is a significant curbing of drilling it shouldn’t take

too long for supply and demand to balance. That being said natural gas storage levels remain close

to capacity and releasing some of this gas will slow the process somewhat.

0

1

2

3

4

5

$/M

MB

tu

Historical spot price STEO forecast price NYMEX futures price

Source: EIA – Short Term Energy Outlook April 2013

Figure 2.4 US Spot Gas Price History with Short Term Forecast and NYMEX Futures 2012-2014 ($/MMBtu)

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The Shale Gas Market 2013-2023 4.7.1 Australian Shale Gas Market Drivers & Restraints Table 4.15 summarises the main market drivers and restraints that will influence the Australian

shale gas market over the next decade.

Drivers Restraints • Low Cost Acreage: In comparison to

the US where deals for over $25,000

per acre have been made, Australian

shale exploration acreage is very low

cost where prices of around $100 per

acre have been seen. The industry is

still young and unproven however the

potential is vast and larger oil and gas

companies, such as BG Group,

ConocoPhillips, Chevron and Statoil

have moved in.

• Asian Gas Demand: There is a

growing demand for natural gas in a

number of Asian economies. Both

China and India are increasing their

LNG import capabilities while Korea

and Japan are also very large

importers of LNG. In these markets

Australia can compete with other

leading LNG exporters such as Qatar,

Indonesia and Malaysia.

• Growing Domestic Market:

Australia’s natural gas demand

increased around 43% from 2000-

2010 and is continuing to show signs

of growth. Australia still heavily relies

on coal for the vast majority of its

electricity production and has the

possibility to turn to natural gas in

order to reduce carbon intensity.

• Lack of Shale Gas Services:

Although Australia is a leader in

developing unconventional gas such

as coalbed methane (CBM) the

country lacks the vital services

required for developing shale gas.

There are a growing number of

horizontal drilling and fracture

stimulation companies in Australia,

especially in the areas where CBM has

been developed. However, currently

these companies will not have enough

equipment and manpower to rapidly

develop shale gas acreage into

producing fields. Commercial

production of Australian shale gas is

therefore some way off.

• LNG Export Projects: Currently

Australia is undertaking a number of

major LNG projects both onshore and

offshore that are likely to add over

50mtpa of LNG export capacity by

2017. The gas feedstock for all the

projects has already been selected

and integrated into calculations of the

economical viability of each project.

Therefore the development of more

capital intensive shale gas resources

is somewhat superfluous. It is clear

that demand for LNG is rising fast,

Table 4.15 Australian Shale Gas Market Drivers & Restraints

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The Shale Gas Market 2013-2023 4.8 Polish Shale Gas Market Forecast 2013-2023 Table 4.17, Figures 4.21 and 4.22 show visiongain’s forecast for the Polish shale gas market over

the next ten years.

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2013-23

Capex $m 460 495 673 895 1,055 1,272 1,562 1,870 2,100 2,352 2,552 2,740 17,565

AGR (%) 7.6 36.0 33.0 17.8 20.6 22.8 19.7 12.3 12.0 8.5 7.4

2018-23 11.9

18.7

25.8CAGR (%) 2013-18

CAGR (%) 2013-23

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

500

1,000

1,500

2,000

2,500

3,000

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

AG

R

Cap

ex $

m

Year

Source: Visiongain 2013

Source: Visiongain 2013

Figure 4.21 Polish Shale Gas Market Forecast 2013-2023 ($m, AGR%)

Table 4.17 Polish Shale Gas Market Forecast 2013-2023 ($m, AGR %, CAGR%, Cumulative)

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The Shale Gas Market 2013-2023 6.1 Chesapeake Energy Company Profile

2013 Total Capital Expenditure $6.4bn Capital Expenditure in this market $3,720m Global market share % 11.2% Revenue (2012) $12.3bn Net Income (2012) -$769m Long Term Debt $bn (2012) $12.1bn Enterprise Value (06.06.13) $30.8bn Headquarters Oklahoma City, OK, USA Ticker CHK Website http://www.chk.com

Chesapeake is the number two gas producing company in the US, only surpassed by the largest oil

and gas company in the world, ExxonMobil. In 2012 the company produced 1.1tcf, had 196tcf of

proved reserves and was one of the largest shale gas developers in the world with over 3.6 million

net shale acres in its North American gas portfolio and a total of 14 million net acres of exploration

and production leasehold in the United States. Chesapeake is partnered with Statoil (32.5%) in its

Marcellus holdings, Plains Exploration & Production Company (20%) in Haynesville, Total (25%) in

Barnett and CNOOC (33.3%) in Pearsall and Eagle Ford. In 2012, Total purchased a 25% stake in

619,000 acres of Chesapeake’s Utica Shale.

Due to its problematic financial situation which saw the company facing a $10bn funding gap

Chesapeake has been selling of parts of its North American assets over the past year. In 2012 the

company sold assets worth $6.9bn, including the sale of most of its assets in the Permian Basin to

Royal Dutch Shell Plc and Chevron Corp as well as nearly all of its infrastructure network in the

region. The company still faces a funding gap of around $3.5bn for 2013 and has continued to sell

off E&P acreage and midstream assets to raise a total $7bn this year. In the first quarter of 2013

alone Chesapeake sold assets worth $2.3bn. Among the deals in 2013 were several involving high

quality shale gas acreage. In April 2013, Southwestern Energy agreed to acquire approximately

162,000 net acres of leasehold in Northeast Pennsylvania prospective for the Marcellus Shale from

Chesapeake and Statoil for approximately $93 million. The acreage is located in Susquehanna,

Wyoming, Tioga and Sullivan counties. The land is mostly undeveloped with current net production

Source: Visiongain 2013

Table 6.2 Chesapeake Overview (Shale Gas Capex $m, Global Market Share %, Net Income $m, Debt $bn, HQ, Ticker, Website)