Royal Dutch Shell (NYSE:RDS.A) plans to increase production from North America by 40% through 2014, based in part on the extensive development of various tight gas and shale basins scattered throughout the continent.
Royal Dutch Shell estimates that the company has access to 40 trillion cubic feet equivalent of resources on its properties, and hopes to double production from these areas by 2015. Ultimately, the company may reach production of 400,000 barrels of oil equivalent (BOE) per day by 2020. This pace of development is based on the future price for natural gas, and the production goals won't be reached in every scenario.

IN PICTURES: 5 Tips To Reading The Balance Sheet

Pinedale Field
Royal Dutch Shell entered the Pinedale Field in Wyoming in 2001. The company has 400 producing wells that it operates at this field, and another 1,000 future drilling locations. Another large operator in the Pinedale Field is Ultra Petroleum (NYSE:UPL), which produces 1.2 billion cubic feet per day of natural gas from its wells.

Marcellus Shale
Royal Dutch Shell entered the Marcellus Shale through the purchase of East Resources, a private oil and gas company, earlier in the year. The company picked up 650,000 prospective acres in Pennsylvania, New York and West Virginia. Royal Dutch Shell plans to drill 90 new wells here in the second half of 2010.

Canada
In Canada, Royal Dutch Shell has exploration and development activities across Alberta and British Columbia. One focus area for Royal Dutch Shell is the Groundbirch project in British Columbia where the company is developing the Montney Shale. Development of this and other areas in Canada should add approximately 100,000 BoE per day from 2009 to 2014.

Eagle Ford Shale
Royal Dutch Shell has 250,000 acres that are prospective for the Eagle Ford Shale in South Texas. The company is currently conducting seismic research on this acreage in the second half of 2010.

Other operators are at a more advanced stage of development of the Eagle Ford Shale. Petrohawk Energy (NYSE:HK) has 357,000 net acres in three separate project areas. The company estimates that its production in 2010 will average between 70-90 million cubic feet equivalent per day.

Haynesville Shale
In the Haynesville Shale, Royal Dutch Shell has 180,000 net acres and is in a joint venture with EnCana (NYSE:ECA). The company has 1,300 drilling locations here, and is also considering developing the Bossier Shale as well.

The Bottom Line
Royal Dutch Shell has amassed a huge portfolio of assets in tight gas basins in North America, and plans major development over the next few years to help increase production growth. (To learn more, see Oil And Gas Industry Primer.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Stock Analysis

    How to Find Quality Stocks Amid the Wreckage

    Finding companies with good earnings and hitting on all cylinders in this environment, although possible, is not easy.
  2. Stock Analysis

    Analyzing Sirius XM's Return on Equity (ROE) (SIRI)

    Learn more about the Sirius XM's overall 2015 performance, return on equity performance and future predictions for the company's ROE in 2016 and beyond.
  3. Stock Analysis

    Glencore Vs. Noble Group

    Read about the differences between Glencore and Noble Group, two companies in the commodities business. Learn about accounting accusations facing Noble Group.
  4. Stock Analysis

    Will Virtusa Corporation's Stock Keep Chugging in 2016? (VRTU)

    Read a thorough review and analysis of Virtusa Corporation's stock looking to project how well the stock is likely to perform for investors in 2016.
  5. Stock Analysis

    Analyzing Porter's Five Forces on JPMorgan Chase (JPM)

    Examine the major money-center bank holding firm, JPMorgan Chase & Company, from the perspective of Porter's five forces model for industry analysis.
  6. Chart Advisor

    Watch This ETF For Signs Of A Reversal (BCX)

    Trying to determine if the commodity markets are ready for a bounce? Take a look at the analysis of this ETF to find out if now is the time to buy.
  7. Investing News

    What You Can Learn from Carl Icahn's Mistakes

    Carl Icahn has been a stellar performer in the investment world for decades, but following his lead these days could be dangerous.
  8. Stock Analysis

    Analyzing Dish Network's Return on Equity (ROE) (DISH, TWC)

    Analyze Dish Network's return on equity (ROE), understand why it has vacillated so greatly in recent years and learn what factors are influencing it.
  9. Investing Basics

    The Importance of Commodity Pricing in Understanding Inflation

    Commodity prices are believed to be a leading indicator of inflation, but does it always hold?
  10. Fundamental Analysis

    5 Must-Have Metrics For Value Investors

    Focusing on certain fundamental metrics is the best way for value investors to cash in gains. Here are the most important metrics to know.
RELATED FAQS
  1. When does a growth stock turn into a value opportunity?

    A growth stock turns into a value opportunity when it trades at a reasonable multiple of the company's earnings per share ... Read Full Answer >>
  2. What is the formula for calculating EBITDA?

    When analyzing financial fitness, corporate accountants and investors alike closely examine a company's financial statements ... Read Full Answer >>
  3. How do I calculate the P/E ratio of a company?

    The price-earnings ratio (P/E ratio) is a valuation measure that compares the level of stock prices to the level of corporate ... Read Full Answer >>
  4. How do you calculate return on equity (ROE)?

    Return on equity (ROE) is a ratio that provides investors insight into how efficiently a company (or more specifically, its ... Read Full Answer >>
  5. How do you calculate working capital?

    Working capital represents the difference between a firm’s current assets and current liabilities. The challenge can be determining ... Read Full Answer >>
  6. What is the formula for calculating the current ratio?

    The current ratio is a financial ratio that investors and analysts use to examine the liquidity of a company and its ability ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center