In recent days, we've met a few new unconventional oil and gas resource plays. While none of them appears to pack the heavyweight punch of a Haynesville or a Marcellus, they do reinforce the overall direction of our domestic energy industry.
That direction, Fools, is horizontal.
During its marathon two-day analyst and investor extravaganza, Chesapeake Energy
One is the West Edmond Hunton Lime in Oklahoma, an oily play right in Chesapeake's backyard. Petrohawk Energy
Chesapeake's other new play, the Cleveland Sand, also has a strong oil component. Neither play appears extensive enough to move the needle too far for a big boy like Chesapeake, but I would be very happy to see the firm get some incremental oil exposure in its production mix. EOG Resources
I mentioned Petrohawk earlier. This company's got a new play down Texas way, called the Eagle Ford Shale. We'll get slightly technical for a second here, so hold on to your ten-gallon hat.
On its special conference call, Petrohawk compared the Eagle Ford to the Haynesville in several respects, though the Haynesville has a higher pressure gradient. As a result, the Eagle Ford will likely contain less gas in place per section. The upshot is that drilling costs ought to be lower, given that you need special materials to drill into overpressured rock. Folks like Halliburton
Once you factor in Petrohawk's considerably lower leasehold acquisition costs, plus the existence of mature infrastructure in the area, I think you've got a recipe for what ought to be strong financial results.