Sector Snap: Natural Gas

Natural gas cos. edge down on worries about global glut of shale resources

Associated Press

NEW YORK (AP) -- Shares in the natural gas sector slid Monday while broader markets climbed, with little to suggest a supply glut that has plagued the market for years will let up.

The Energy Department's Energy Information Administration said Monday that shale oil and gas resources are abundant globally after assessing 137 shale formations in 41 countries outside the United States.

The U.S. has been the epicenter of the shale drilling movement after energy companies figured out how to remove natural gas from rock formations in a cost-effective manner more than a decade ago.

The EIA estimates that recoverable resources of global shale gas have now reached 7,299 trillion cubic feet, which is 10 percent greater than was projected just two years ago.

While the report includes shale resources that weren't included in previous estimates, it doesn't include potential shale formations, such as those underneath the large oil fields in the Middle East and the Caspian region. Currently, only the United States and Canada are producing shale oil and shale gas in commercial quantities, the administration said.

The profits of natural gas companies have taken a hit in recent years, as a glut of gas on the market and weak demand have driven prices down.

The EIA said that interest in shale oil and gas production outside of the U.S. continues to grow, though it remains unclear how economically feasible it will be to recover those shale resources.

Here's how shares of some natural gas companies were trading Monday:

— Concho Resources Inc., down 73 cents to $88.67.

— Approach Resources Inc., down 22 cents to $25.17.

— Diamondback Energy Inc., down 42 cents to $35.03.

— Occidental Petroleum Corp., down 24 cents to $92.89.

— Forest Oil Corp., down 6 cents to $4.45.

— EOG Resources Inc., down 37 cents to $132.31.

— Nobel Energy Inc., down 21 cents to $58.40.

— Chesapeake Energy Corp., down 1 cent to $21.99.

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