Please ensure Javascript is enabled for purposes of website accessibility

All Shale Is Breaking Loose

By Adam J. Crawford - Updated Apr 6, 2017 at 10:22PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The discovery of a potentially huge gas field is attracting interest.

Thanks to new drilling techniques, the United States is sitting atop a gas bonanza. Just how much natural gas? That depends whom you ask. But whatever the current estimates are, they are likely to rise in the near future thanks to a new shale play called the Utica Shale, which some believe is destined to become the premiere gas field in the world.    

Meet the drillers
Intrigued by the prospects of the Utica, Consol Energy (NYSE: CNX) drilled a well last year and recovered more gas in a 24-hour period than any of the company's wells located in the gas-rich Marcellus Shale. Consol is spending $35 million on six more exploratory wells this year. And other companies are following suit.   

Chevron (NYSE: CVX) has access to 623,000 acres of the Utica Shale thanks to the company's recent acquisition of Atlas Energy. Chesapeake Energy (NYSE: CHK) is so confident in the Utica's potential that the company recently invested $1 billion in acquiring leasing rights -- without even testing the Utica's productivity.     

Range you can believe in
Range Resources
(NYSE: RRC), one of the first companies to discover the Marcellus shale, is also excited about the Utica's prospects. CEO John Pinkerton calls it "one of the most economic plays in North America." 

The reason is because the Utica Shale is partially located beneath the Marcellus Shale. This allows companies like Range Resources to tap another shale from the same well and substantially drive down costs in the process (a double dip, so to speak). Pinkerton predicts shareholders stand to make a "whole bunch of dough" from the deal.  

The bottom line
It should be noted shareholders of these companies won't make jack unless demand for natural gas surges, which I believe it will. So don't drag your feet on this investment opportunity. In 2004, few had heard of the Marcellus Shale; currently, it's one of the largest gas fields in the world. It is likely the potential of the Utica will soon be realized. Do your due diligence and act accordingly. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Chevron Corporation Stock Quote
Chevron Corporation
CVX
$149.77 (1.49%) $2.20
CONSOL Energy Inc. Stock Quote
CONSOL Energy Inc.
CNX
$17.59 (2.09%) $0.36
Chesapeake Energy Corporation Stock Quote
Chesapeake Energy Corporation
CHKA.Q
Range Resources Corporation Stock Quote
Range Resources Corporation
RRC
$27.73 (2.29%) $0.62

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
332%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.