Exploration and production companies moved forward on the exploration of a number of lesser known shale plays in the United States during the second quarter of 2011. These emerging plays include the Mowry, Burkett and Geneseo Shales.
TUTORIAL: The Industry Handbook: The Oil Services Industry

Mowry Shale
Plains Exploration and Production (NYSE:PXP) is working on the Mowry Shale on its acreage in the Big Horn Basin in Wyoming, where it has 106,300 net acres under lease. The Mowry Shale is present here at depths between 6,000 and 10,000 feet and is from 250 to 400 feet thick. The company believes the Mowry Shale shares geological characteristics similar to other onshore shale oil plays in the United States.

Plains Exploration and Production recently drilled and completed the company's first well here. The company reported "high quality oil in small quantities" and is currently working on a second Mowry Shale well.

During the second quarter of 2011 conference call, the management of Plains Exploration and Production called the results of the first well "geologically encouraging" but not "commercially encouraging."

Plains Exploration and Production intends to study the results of these two wells and drill two more wells in 2012 to investigate this shale. (For more on oil investing, see A Guide To Investing In Oil Markets.)

Geneseo/Burkett Shale
Ultra Petroleum (NYSE:UPL) is developing the Marcellus Shale in Pennsylvania, and is also investigating other shale deposits on its acreage here. The Geneseo Shale is one of these plays, which Ultra Petroleum estimates is present on approximately 75% of its leasehold.

Ultra Petroleum recently completed a well to this formation and reported an early flow rate of 3.5 million cubic feet per day and a stabilized production rate of one million cubic feet per day for the two months. The company plans five more Geneseo Shale wells in 2011.

Rex Energy (Nasdaq:REXX) is also active in the Marcellus Shale and recently announced a new position in Ohio that is prospective for the Utica Shale. While most investors were caught up in the excitement over this new position, the company also drilled a test well into the Burkett Shale from a six-well pad in Butler County, Pennsylvania.

Rex Energy didn't disclose any additional information on this well during its conference call, and the company plans to begin completion operations in the third quarter of 2011.

Another operator that was evaluating the Burkett Shale was Atlas Energy (Nasdaq:ATLS), which reported a number of successful test wells in 2010. Atlas Energy is being purchased by Chevron (NYSE:CVX).

Range Resources (NYSE:RRC) is also working on a number of new shale plays that the company collectively refers to as the Upper Devonian. The company recently spud its third well here into an area that it believes has a high oil and liquids content.

The Bottom Line
It is now apparent that the technology to unlock huge amounts of oil and gas resources can be used in many other areas in the onshore United States, as well as globally. This has the potential to help supply enough energy to meet the soaring demand that most analysts are predicting over the next few decades. (For related reading, see Unearth Profits In Oil Exploration And Production.)

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

Related Articles
  1. Fundamental Analysis

    4 Predictions for Oil in 2016

    Learn four predictions for oil markets in 2016 including where prices are heading and the key fundamental factors driving the market.
  2. Fundamental Analysis

    Performance Review: Commodities in 2015

    Learn how commodities took a big hit in 2015 with a huge variance in performances. Discover how the major commodities performed over the year.
  3. Investing News

    Icahn's Bet on Cheniere Energy: Should You Follow?

    Investing legend Carl Icahn continues to lose money on Cheniere Energy, but he's increasing his stake. Should you follow his lead?
  4. Stock Analysis

    Analyzing Google's Return on Equity (ROE) (GOOGL)

    Learn about Alphabet's return on equity. How has its ROE changed over time, how does it compare to its peers and what factors are driving ROE for the company?
  5. Investing News

    Is Buffett's Bet on Oil Right for You? (XOM, PSX)

    Oil stocks are getting trounced, but Warren Buffett still likes one of them. Should you follow the leader?
  6. Stock Analysis

    The Biggest Risks of Investing in SandRidge Stock

    Learn about the significant risks of investing in SandRidge. Read how the company may not be able to service its substantial debt load.
  7. Stock Analysis

    The Top 5 Micro Cap Alternative Energy Stocks for 2016 (AMSC, SLTD)

    Follow a cautious approach when purchasing micro-cap stocks in the alternative energy sector. Learn about five alternative energy micro-caps worth considering.
  8. Stock Analysis

    Analyzing Porter's Five Forces on Under Armour (UA)

    Learn about Under Armour and how it differentiates itself in the competitive athletic apparel industry in light of the Porter's Five Forces Model.
  9. Stock Analysis

    The Biggest Risks of Investing in Qualcomm Stock (QCOM, BRCM)

    Understand the long-term fundamental risks related to investing in Qualcomm stock, and how financial ratios also play into the investment consideration.
  10. Stock Analysis

    The Biggest Risks of Investing in Johnson & Johnson Stock (JNJ)

    Learn the largest risks to investing in Johnson & Johnson through fundamental analysis and other potential risks. Also discover how JNJ compares to its peers.
  1. 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 >>
  2. 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 >>
  3. 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 >>
  4. 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 >>
  5. 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 >>
  6. What is the formula for calculating earnings per share (EPS)?

    Earnings per share (EPS) is the portion of a company’s profit that is allocated to each outstanding share of common stock, ... Read Full Answer >>
Trading Center