Downturn in Natural Gas CAPEX? | Russell T. Rudy Energy LLC
For some time now, many industry observers have felt that interest in gas projects has been waning. Now, in an opinion piece in “Rigzone”, Richard Krijgsman of Evaluate Energy, claims there is empirical evidence of this trend.
Since energy companies do not generally report their capital expenditures (CAPEX) separately for oil and gas, Evaluate Energy divided a large number of companies into predominately oil and predominately gas groups. The oil group consisted of 85 companies with over 85% of their total production from oil projects. The gas group was comprised of 29 companies with over 75% of their production from gas.
While energy investments in the aggregate increased in 2013, they did so at a decreasing rate. Further, the increase was solely attributable to oil. Krijgsman postulates that this is due to the run up in natural gas supply, and concurrent price drop, as a result of the U. S. shale revolution.
The article has some excellent graphs as well as a listing of the companies in both the oil and gas groups used in the analysis. To view them and read the article in its entirety, please go to http://www.rigzone.com/news/oil_gas/a/133170/Investment_in_Natural_Gas_Loses_its_Shine.
