Got shale?

Alternative title: Taking the edge off peak oil.

Oil is unlikely to go back to $30, even with this potential boom in shale gas production in the US, but it's looking like we actually have something workable here, mid-term.

The peak oil doomsters are really not going to be happy about this development.

The answer, as always, was somewhere in the middle.

CNBC: Nat Gas Plays.

Star Telegram: Natural gas stocks take big drops since July 1.

Quotes:

XTO Chairman Bob Simpson told the paper that the shale-gas fields popping up across the country are proving to be "discoveries the size of which you haven’t seen for 50 years in our business."

He called the Barnett Shale "one of the greatest gas fields ever found" and suggested that the huge natural gas finds could boost demand because they suggest that there will be ample supply.

The actual reserves from the nation’s shale-gas fields are mostly speculative because the formations are relatively new and haven’t been fully explored.

The Barnett, discovered in 1981, is relatively mature, but others, like Louisiana’s Haynesville Shale and Appalachia’s Marcellus, are sparsely drilled.

That didn’t stop Friedman, Billings Ramsey analyst Rehan Rashid from working up his own estimates of the fields’ reserves, which he presented Wednesday in Houston. Rashid told Oil and Gas Investor magazine that he figures that the Barnett Shale holds 55 trillion cubic feet of recoverable gas.

But he pegs the Haynesville at more than twice that, or 120 trillion cubic feet, and the Marcellus at 68 trillion. Arkansas’ Fayetteville Shale follows the Barnett at 25 trillion, and Oklahoma’s Woodford Shale weighs in at 14 trillion.

He said he expects those fields to greatly boost the values of the companies that have staked holdings there.

CNBC: Peak Oil Theory.

CNBC: Drilling for Profit.

CNBC: Peak Performance?

Pickens Plan.

Haynesville Shale.

shreveporttimes.com: CEO: Haynesville Shale is fourth largest in the world.

Quotes:

The Haynesville Shale is likely to become America's largest natural gas field and perhaps the fourth largest in the world, Chesapeake Energy Chairman and CEO Aubrey McClendon disclosed Wednesday in a conference call with its newest partner, Plains Exploration and Production Co.

See, among others:

CHK & PXP

Encana & Royal Dutch Shell

Petrohawk

and..

GDP
PVA & GMXR
CRK
STR
EP
SM
XCO
FST
DVN
APC
HP (driller)
XTO & Hunt
BRY & O'Brien
COG & undisclosed

Did I forget anybody? Probably.

Aubrey McClendon Still Buying.

Aubrey McClendon, CEO of Chesapeake Energy continues his campaign of aggressively buying his companies' stock.

The company was on a large on-shore leasing spree for a while, accumulated a significant inventory, and now is working on bringing it's natural gas to production. It's been steadily rising up the list of American natural gas producers; it's now at number 3. It has a lot of debt, but with natural gas prices doing well, a lot of drilling ahead of it, a successful hedging program, and even a respected weather team, they look like they have a lot of room to run.

I own some already, and may buy a bit more on a dip.

Let it snow, let it snow, let it snow..

A follow up on Chesapeake Energy's predictions for winter:

TheStreet.com: Two Resources for Energy Insights.

Quotes:

Watch the Weather

One of the more important variables in predicting energy-commodity prices in the month of December is weather. Winter officially begins the middle of the month, and bone-chilling cold is bullish for the energy markets. In fact, last year's historically warm winter was the primary cause of the swoon in natural gas prices this past summer.

Hence, all energy investors have at least one eye on the forecasts, especially the longer-range forecasts for January and February. So I decided to check in with Chesapeake Energy (CHK - commentary - Cramer's Take - Rating), the large natural gas producer, which has its own uncannily accurate meteorologists. Cheapeake's meteorologists were some of the few who accurately predicted last winter's warmth.

The accuracy continues. My sources suggest Chesapeake's forecasters were spot-on in predicting last week's cold-and-snow snap through the upper Midwest. The Chesapeake gang's forecast for the coming week suggests slightly warmer-than-normal temperatures, followed by a holiday cold snap that, if it happens, could help rally energy prices.

More important, the Chesapeake weather team sees a more normal winter season come 2007, compared with the past 30 years. That means that, when compared with the last 10 years (which have been consistently warmer than longer-term norms), winter weather should be colder than normal, a positive for energy investors.

You can keep an informal eye on the weather via these links.

A lesson in how to trade natural gas.

I'm afraid I've gone a bit coco for natural gas, and along comes this.

By this, I reference the Chesapeake Energy Conference Call, which is resoundingly bullish on the future of natural gas prices in North America, and contains solid insight into their views and recent trading of natural gas.

In addition, their weather analysis indicates a more normal winter is in store for the US, meaning something colder than in the past couple of years. This is different from the consensus that we will have a mild winter, but so far Chesapeake's call for a colder than average September and October have played out as predicted.

TheStreet.com: Inflection Point for Energy Investors.

Q3 2006 Chesapeake Energy Corporation Earnings Conference Call.

Some prior posts on natural gas:

Jim Rogers: Time to buy natural gas.

The Case for Natural Gas.

Unconventional Success in Gas Production (No Yale Degree Required).

Has Aubrey McClendon lost his mind?!