In a remote region of northeast British Columbia, natural gas explorers are grabbing acreage so fiercely that you'd think they had found the Promised Land.
The cause of this land rush is a shale formation that some have characterized as being analogous to the Fort Worth Basin's Barnett -- in terms of rock quality, anyway. The Canadian shale actually appears to contain significantly more gas in place per acre. Just look at EOG Resources'
Fellow Barnett explorer Quicksilver Resources
With this announcement, Quicksilver leapfrogs Nexen
There are a few reasons why I think energy investors shouldn't fall totally head over heels for the Horn River play. For one, this shale is deep, making drilling more expensive. Second, year-round drilling in northern Canada is precluded by weather conditions, so the pace of development can never be as furious as that seen in the Barnett. These are just two reasons to help explain why EOG is only modeling a 20% after-tax rate of return in the play. That'll pay the bills, but this isn't the Holy Grail of natural gas.