Tickers in this Article: TLM, XOM, COP, MRO, CVX
If the pace at which the exploration and production industry is developing domestic shale plays can be called manic, then the pace at which the industry is developing European shale plays would have to be described as slumbering.

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The Majors
Many European governments have given out concessions to explore and develop shale basins, as they looked over in envy at the pace and success of U.S. shale development. These countries include Hungary, France, Poland and Germany. Yet despite the potential of these plays, an investor has to scour through news wires and transcripts of conference calls to find out about any upcoming development.

Conoco Phillips (NYSE:COP) has concessions in Poland, and is just at the start of its program here. The company said during its recent conference call that it plans to spud its first wells in the second quarter of 2010.

Chevron Corp (NYSE:CVX) is also involved in Poland, and is conducting seismic in 2010 on its acreage, with an eye toward starting up drilling in 2011.

Talisman Energy (NYSE:TLM) has a 60% interest in two concessions in Poland, and was recently awarded a third. Talisman Energy is also conducting seismic during 2010, and plans on drilling as many as six wells in 2011 and 2012.

Marathon Oil (NYSE:MRO) has 1.25 million acres in Poland, and is looking for a partnership with another company to help share the risk.

Exxon Mobil (NYSE:XOM) seems to have the most concessions, and is furthest along in development. The company has a large position in Germany. It has drilled three wells to help determine the potential of the play and is assembling further seismic data.

In Poland, Exxon Mobil has five concessions totaling more than 1.3 million acres in the Podlasie and Lublin Basins, and is also assembling seismic to decide the best way to proceed. (How a company accounts for its expenses affects how its net income and cash flow numbers are reported. To lean more, see Accounting For Differences In Oil And Gas Accounting.)

Bigger Means Slower
One possible explanation for this seemingly slow pace of development is that the more nimble independent oil and gas companies that dominate U.S. shale plays are not well represented over in Europe. The rights to the acreage have been given mostly to the major integrated oil companies that tend to move slower.

Another reason might be the lack of infrastructure to process and transport any hydrocarbons produced from shale in Europe. There also may be issues regarding water availability and environmental regulations to deal with. These have to be dealt with prior to any large-scale development of the assets.

Other reasons might be reluctance by the majors to discuss any development for competitive reasons, or maybe they are waiting for the other guy to take the exploration risk of figuring out a new play.

Bottom Line
The development of European shale seems to be creeping slowly forward, as the majors work to collect seismic and drill test wells to determine the best way to proceed. This measured pace may be necessary to achieve the best results from these areas. (For more stock analysis, check out Almost Another Recession.)

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