• 2010 Leadership in Oil and Gas: Natural Gas Looks Strong Long Term, Struggles to Continue in Short Term

• Shell Secures Marcellus Position for US$4.7 Billion
• Enterprise Announces Haynesville, Eagle Ford Shale Expansions
• Bentek’s Bradford: Marcellus Production Will Disrupt Markets

• EQT, DCP Midstream Agree to JV in Marcellus, Huron Shales
• May 2010 Frac Spread: Heavy Margin Losses as Demand, NGL Prices Remain Low

• Frac Spread Margins Continue to Fall as Feedstock Prices Improve

• NGL Prices Improve, But Still on the Low End for the Year

• Reviewing the Gas Utility Market

• Total to Favor Oil Acquisitions Due to Gas Bubble

Shell Secures Marcellus Position for US$4.7 Billion

Dutch major Royal Dutch Shell reported it intends to acquire Marcellus shale gas assets through the purchase of the principal subsidiaries of Terrence Pegula's Pennslyvania-based East Resources Inc. and its private-equity investor Kohlberg Kravis Roberts & Co. for US$4.7 billion in cash. The acquisition is the largest corporate M&A transaction in 2010, and the largest transaction in the Marcellus shale to date.

Enterprise Announces Haynesville, Eagle Ford Shale Expansions

Acadian Gas LLC, which is owned by Enterprise Product Partners LP and Duncan Energy Partners LP, announced it was increasing the capacity of its Haynesville Extension pipeline, which is currently under construction, by 200 million cubic feet per day (MMcf/d).

Bentek’s Bradford: Marcellus Production Will Disrupt Markets

The Marcellus shale play is the “Beast in the East” that will disrupt supply and demand and gas prices, according to Andrew Bradford, Northeast team leader for Bentek Energy LLC, the Colorado-based midstream research and consulting firm. The play’s surging production and vast potential are changing the North American supply picture, with Appalachian Basin gas output set to double by 2014.

EQT, DCP Midstream Agree to JV in Marcellus, Huron Shales

EQT Corp. and DCP Midstream Partners LP signed a letter of intent to create a 50/50 joint venture in the Marcellus and Huron shales. The JV will offer natural gas processing and related natural gas liquids services to EQT and third-party producers in the shales and will serve as EQT’s preferred processor for wet gas in the region.

May 2010 Frac Spread: Heavy Margin Losses as Demand, NGL Prices Remain Low

Frac spread margins for the month of May saw decreases across the board due to the “dead zone” that is the period between the end of winter and the beginning of the cooling season. This period coincided with a drop in natural gas liquid (NGL) prices due to the continued uncertainty of the global economy.

Frac Spread Margins Continue to Fall as Feedstock Prices Improve

Natural gas liquid (NGL) frac spread margins were largely down this week as an improvement in prices still wasn’t enough to overcome last week’s heavy losses. Additionally, natural gas feedstock prices at Conway improved by 9% while the Mont Belvieu price improved by 8%.

NGL Prices Improve, But Still on the Low End for the Year

Natural gas liquid (NGL) prices posted gains this week following the heavy losses from the prior week. While prices for the most part rose from last week, they remained among the lowest at both Mont Belvieu and Conway for the year.

Reviewing the Gas Utility Market

The number of estimated gas distribution main miles has increased to 1.208 million, according to PHMSA.

Total to Favor Oil Acquisitions Due to Gas Bubble

Jean-Jacques Mosconi, vice president of strategic planning at Total, told attendees at last week’s Reuters Energy Summit that the company was eyeing acquisitions of natural gas and oil assets over corporation acquisitions.

All rights reserved. Reproduction in whole or in part, in any form or medium without express written permission is prohibited.