So is it correct? Here's what Alex Grant (an analyst at an investment bank) said ... Exploration is expensive and it is easy to spend more on drilling a well than the value of gas that comes out of the ground. Drilling costs are significantly higher in the UK than the US. The nascent supply chain and long licensing process are largely to blame. ….“At the minute, the economic equation is negative,” says Alex Grant at investment bank Jefferies. “It’s costing [UK explorers] well over $10m to drill a well – compared to say $4m in the US – and the gas they can get out is worth a lot less than that. If this is the best they can do then the equation doesn’t work on a per well basis and it doesn’t matter that they have huge amounts of gas.”
Does this guy know more than Total and GDF Suez? They seem to believe that it's worth putting their money in to get a piece of the action.
DTE Price at posting:
12.0¢ Sentiment: None Disclosure: Held
