Quick read on real costs by basin across the USA:

Marcellus Leads the Gas Plays

Gas markets have already withstood the price cut rollercoaster that is currently plaguing oil, but the economics are still viable in the majority of large basins. Wet gas is the most economic, with breakevens of the wet Marcellus and wet Utica at $2.50 and $3.10 per thousand cubic feet (Mcf) respectively. Dry Marcellus gas is next in line at a $3.50 per Mcf breakeven. The Haynesville, Fayetteville and Barnett are more capital intensive, requiring prices ranging from $3.75 to $4.25 per Mcf. The latter three plays all have a higher price netback than the Appalachia region, which further proves the strength of the Marcellus/Utica plays.

Here's the link:

http://www.oilandgas360.com/eagle-ford-marcellus-economic-basins-to...

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I wonder where they're getting these breakevens from.  I somehow doubt that they're representative of the full-cycle cost of production.

Shell also made a huge statement in the Summer, selling both wet utica and proven pinedale assets to increase and focus their exposure in North Central PA, Potter and Tioga Counties, adding a 155,000 acres to prove out the new Northern Utica  (see Shell PR from summer)

So along with the plants, they are doing it with their E&P division as well.  They have 3 producing, one well about to be fracked, and a fifth they just started drilling last week, all in NW Tioga.

Shell drilled/fracked/and is producing currently 3 utica wells in nw tioga. There is public disclosure on the neal/gee well. On the third well the production will be reported in late jan/early feb.

The point being, on the back of their discovery, they swapped out of wet utica and the proven pinedale to increase their position in potter/tioga.

I cant imagine they increased their position b/c they thought the rock was going to be a weak formation, do you?

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