The exploration and production industry advanced the development of some less publicized shale plays during the third quarter of 2011. These plays include the Tuscaloosa Marine Shale in Louisiana and Mississippi, and the Collingwood Shale in Michigan.

Investopedia Markets: Explore the best one-stop source for financial news, quotes and insights.

Collingwood Shale
EnCana (NYSE:ECA) first disclosed a position in the Collingwood Shale back in 2010, and has assembled 425,000 net acres prospective for this play. The Collingwood Shale is present in parts of central and northern Michigan, and like other emerging plays has dry gas and liquids rich sections. (For related reading, see A Guide To Investing In Oil Markets.)

EnCana has drilled two horizontal wells into, what the company believes is, the wet gas area of the Collingwood Shale. The company expects to complete these wells during the fourth quarter of 2011.

Another company with exposure to the Collingwood Shale is BreitBurn Energy Partners (Nasdaq:BBEP). The company has more than 120,000 net acres with the majority of the leases held by production from other formations.

BreitBurn Energy Partners reported, during its second quarter of 2011 conference call, that the company was not active in the Collingwood Shale, and was waiting for the industry to prove the play up. The company reports third quarter results on November 8 and may disclose additional information on this play.

Tuscaloosa Marine Shale
Devon Energy (NYSE:DVN) is involved with the Tuscaloosa Marine Shale, an early stage play that is present in areas near the Louisiana and Mississippi border. The company has drilled, or permitted, three wells into this formation, and is analyzing the results before planning more development.

Devon Energy disclosed during the company's third quarter of 2011 earnings call that it was looking for a joint venture partner to help share the cost and risk involved with developing the Tuscaloosa Shale, and other exploration plays in its portfolio. (For more on ventures, see Valuing Startup Ventures.)

One company, outside of the industry, that might benefit from the development of the Tuscaloosa Marine Shale is Weyerhaeuser (NYSE:WY), which has a small Minerals business segment.

Weyerhaeuser owns more than seven million acres of mineral rights, and already earns revenue from more than 1,000 wells. The company also has a small lease position prospective for the Haynesville Shale in the northern part of Louisiana, and has exposure to the Tuscaloosa Marine Shale on its acreage in southern Louisiana.

EnCana also has acreage prospective for the Tuscaloosa Marine Shale, and is partnering with Denbury Resources (NYSE:DNR). The company has approximately 270,000 net acres under lease, and recently completed a horizontal well with an average production rate of 310 barrels of oil per day during the first thirty days of production.

EnCana is currently drilling another horizontal well and expects to begin completion operations in November. The company also plans a third horizontal well into the Tuscaloosa Marine Shale.

The Bottom Line
There are so many emerging shale plays in the United States, that many don't get the same media and investor attention as the Bakken or Eagle ford Shale plays. This may change if the industry starts to report some successful wells in these areas. (For related reading on oil, see Oil: A Big Investment With Big Tax Breaks.)

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

At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.

Related Articles
  1. Chart Advisor

    Rare Earth Metals Continue To Struggle

    Rare earth metals are used in many of today's products and many investors are wondering if consumer demand is enough to offset the global economic slowdown. We'll take a look at how they are ...
  2. Stock Analysis

    Analyzing Home Depot's Return on Equity (ROE)

    Discover what Home Depot's return on equity (ROE) ratio says about the performance of the company and how it relates to historical averages and industry trends.
  3. Investing

    Asset Manager Ethics: Acting With Competence and Diligence

    Managers must make investment decisions based on their personal investment process, which in turn should be based on solid research and due diligence.
  4. Forex Education

    Understanding The Income Statement

    Learn how to use revenue and expenses, among other factors, to break down and analyze a company.
  5. Stock Analysis

    Will J.C. Penney Come Back in 2016? (JCP)

    J.C. Penney is without a doubt turning itself around, but that doesn't guarantee the stock will respond immediately.
  6. Economics

    Why It Is Important to Follow Crude Oil Inventories

    Discover what oil inventories are, how they are communicated and what important insights they provide into the state of the oil market.
  7. Investing

    Time to Bring Active Back into a Portfolio?

    While stocks have rallied since the economic recovery in 2009, many active portfolio managers have struggled to deliver investor returns in excess.
  8. Economics

    Investing Opportunities as Central Banks Diverge

    After the Paris attacks investors are focusing on central bank policy and its potential for divergence: tightened by the Fed while the ECB pursues easing.
  9. Stock Analysis

    The Biggest Risks of Investing in Pfizer Stock

    Learn the biggest potential risks that may affect the price of Pfizer's stock, complete with a fundamental analysis and review of other external factors.
  10. Stock Analysis

    Allstate: How Being Boring Earns it Billions (ALL)

    A summary of what Allstate Insurance sells and whom it sells it to including recent mergers and acquisitions that have helped boost its bottom line.
  1. Which mutual funds made money in 2008?

    Out of the 2,800 mutual funds that Morningstar, Inc., the leading provider of independent investment research in North America, ... Read Full Answer >>
  2. Do hedge funds invest in commodities?

    There are several hedge funds that invest in commodities. Many hedge funds have broad macroeconomic strategies and invest ... Read Full Answer >>
  3. What does low working capital say about a company's financial prospects?

    When a company has low working capital, it can mean one of two things. In most cases, low working capital means the business ... Read Full Answer >>
  4. Do nonprofit organizations have working capital?

    Nonprofit organizations continuously face debate over how much money they bring in that is kept in reserve. These financial ... Read Full Answer >>
  5. Can a company's working capital turnover ratio be negative?

    A company's working capital turnover ratio can be negative when a company's current liabilities exceed its current assets. ... Read Full Answer >>
  6. Does working capital measure liquidity?

    Working capital is a commonly used metric, not only for a company’s liquidity but also for its operational efficiency and ... Read Full Answer >>

You May Also Like

Trading Center