Sunday, June 14, 2009

Investing In Shale Gas

How to Invest In Shale Gas Fields Like The Marcellus And Eagle Ford Shale

By Doodlebugs, eHow Member Rating
How to Invest In Shale Gas Fields Like The Marcellus And Eagle Ford Shale

The United States is the Saudi Arabia of natural gas, thanks to the discovery of new shale gas deposits like the Marcellus Formation. Here is how you can invest in what could be our primary energy source in the future. (source)

  1. Step 1

    Learn as much as you can about shale gas and its economic importance. The United States has an abundance of clean natural gas trapped in shale formations such as the Marcellus Shale of Appalachia, the Barnett Shale near Fort Worth, the Haynesville Shale in Louisiana and newly discovered gas shales such as the Eagle Ford shale in South Texas. Many experts believe that there is enough natural gas in these shale formations to last the United States a hundred years or more. According to oil man T. Boone Pickens this clean fuel may one day power our cars as well as our homes. How can you invest in this growing industry? There are a couple of ways to invest in shale gas. Some are more risky than others.

  2. Step 2

    Consider direct investment in a well. One way to invest in shale gas is to invest directly in a wildcat well being planned. This type of investing is for the rich only since there is a high probability it could be a dry hole but potential rewards could be very high. For direct investment you will often need as much as $100,000. If you have the stomach for this kind of investing contact companies like Petrohawk Resources, symbol HK, and inquire about direct investment.
    The second, and less risky way of investing in shale gas is to buy shares of the companies that are most active in drilling in gas shales such as the Marcellus shale formation. These include Chesapeake, symbol CHK, XTO Energy, symbol XTO, Petrohawk, symbol HK, Devon Energy, symbol DVN, and EOG Resources, symbol EOG.
    Petrohawk (HK) and TXCO Resources (TXCO) are active in the newly discovered Eagle Ford Shale in South Texas. Chesapeake, Devon and XTO are active in the Barnett Shale and Marcellus formation.

  3. Step 3

    Buy shares on the open market. A third option for investing in shale natural gas is to buy shares of an Exchange Traded fund or ETF. You can invest in natural gas as a commodity with the ETF whose symbol is UNG or you can focus on exploration and production with an ETF called First Trust ISE Revere Natural Gas, symbol FCG and listed on the NYSE, which is composed of companies like the ones mentioned in step 2 that explore for and produce natural gas.
    For more info on the Marcellus Formation see the resources section.

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