Chesapeake Energy Corp (CHK)

[ogbull]

ADVANCED DRILLING IS HERE!

I have talked many times about the number of tier 1 rigs drilling gas plays versus the number drilling oil plays. Tier 1 rigs are in high demand and short supply because they are the only rigs that can drill the long lateral holes needed to bring drilling cost down and increase production for less money (more profit). But we have only 90 rigs working gas plays versus 400 working oil. This means that the majority of tier 1 rigs are already committed to oil plays. In other words, gas production could fall rapidly and catch us with only a few tier 1 rigs needed to drill the most profitable lateral wells. It would be financial stupid to drill a gas well with any other rig except tier 1. Said differently, we may well run out of natgas before the end of heating season. Sound crazy? I don't think so. And, I think you might agree if you read the news on the gas well drilled with the world's longest lateral.

Read it and you'll understand more of what I been saying for several months.

http://www.oilandgas360.com/shale-record-is-eclipse-resources-124-stage-purple-hayes-well-the-longest-onshore-lateral-ever-drilled/