This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

ITG Investment Research: U.S. Energy Reserves More Than Double Official Estimates

Stocks in this article: ITG

CALGARY AND NEW YORK, Oct. 8, 2012 /PRNewswire/ -- ITG (NYSE: ITG), a leading independent execution and research broker, today announced the release of a comprehensive report analyzing recoverable onshore oil and gas resource in the lower 48 United States (L48).  The 64-page report, No More Guessing: Hardcore IV estimates total remaining recoverable resource at 1.1 quadrillion cubic feet equivalent (Qcfe) across 450,000 drilling locations.  The new ITG report also noted estimated recoverable resource of 900 trillion cubic feet equivalent (Tcfe) in 10 overlapping plays compared to 426 Tcfe for those same plays noted in a study by the US Energy Information Agency. 

(Logo: )

The new ITG study is based on a county-by-county dispatch curve for 37 major onshore plays.  According to the study, of the 1.1 Qcfe in resource, over 680 Tcfe comes from gas-prone counties, 210 Tcfe from liquids-rich counties and over 30 billion barrels of oil equivalent (Bboe) from oil-prone counties. The Marcellus shale holds the largest remaining recoverable resource at 330 Tcfe, followed by the Eagle Ford and Bakken shales at 152 Tcfe (25 Bboe) and 72 Tcfe (12 Bboe), respectively.

Other key findings:

  • Base decline rate (i.e., the amount that production would fall one year out if no new wells were completed) for L48 natural gas and oil is 25% and 20%, respectively, based on production data from more than one million wells.
  • At year-end 2011, Marcellus, Haynesville, Barnett and Fayetteville accounted for ~60% of new monthly gas production additions in the L48. Bakken, Eagle Ford and Permian accounted for ~60% of all new oil production additions.
  • ITG Investment Research calculated break-even NYMEX prices for over 24,000 individual wells in the L48 using over 140 different type curves. ITG estimates the Marcellus is the lowest-cost gas play with a weighted average break-even price of $3.81/Million cubic feet (Mcf).
  • The current horizontal rig-weighted supply cost for gas plays averages $4.35/Mcf, while the figure for oil and liquids-rich plays averages ~$2.94/Mcf, or $74 per barrel (bbl).
  • Based on rig assumptions, ITG's model shows L48 natural gas production will fall slightly through 2013 and then grow again, but at a much slower rate than that of the last few years. ITG estimates the average break-even production cost of incremental new gas was ~$4.30/Mcf in 2011 and calculates this figure has now declined to ~$3.70/Mcf. The drop reflects a greater percentage of rigs in liquids-rich plays plus a greater percentage of dry gas coming from the low-cost Marcellus.
  • ITG forecasts total L48 onshore oil production will reach 10 million bbl per day by 2025, up from the current rate of about six million bbl per day. Bakken, Eagle Ford and Permian are the three main growth drivers, each expected to contribute over 1.5MM bbl per day in 2025 and each having current weighted average break-evens of ~$65 per bbl for West Texas Intermediate crude. We expect L48 monthly oil production additions to increase to over 300,000 bbl per day each month by 2015, up from current addition levels of over 200,000 bbl per day each month and the 2009 rate of 100,000 bbl per day each month.
  • If the additional processing capacity build-out continues in the L48 and liquids-rich plays are processed to full capacity, ITG estimates natural gas liquids production (excluding C5+ products) could grow to 3.2MM bbl per day by 2020 and ~3.5MM bbl per day by 2025.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,959.44 +154.64 0.87%
S&P 500 2,078.54 +7.89 0.38%
NASDAQ 4,781.4240 +16.0440 0.34%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs