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EV Energy Partners LP Message Board

  • rrb1981 rrb1981 Sep 26, 2010 7:33 PM Flag

    Shale Play Acquisitions

    I wouldn't be surprised if we see a shale play acquisition pretty soon. With gas prices bottoming out, it would be a very opportunistic time for an MLP like EVEP to fleece a major or two that are looking to direct more cash into oil projects. I'd much rather EVEP be buying highly repeatable shale gas reserves and production when prices are low than when gas is at $6.00/mcf.

    I am convinced that gas prices will recover over the next 18 months to around $5.00/mcf, perhaps $5.50/mcf. The shift by producers into oil production, the fact that many companies hedging is very thin and that most producers are close to getting the bulk of their acreage HBP. All of these issues are aligning to allow gas to slowly inch up over the next 18 months. If EVEP is wise, they might be able to land some good acreage in low cost basins that would allow them some nice uplift when prices normalize to around $5.00/mcf.

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    • I have long thought that the shale basins, in the long term, present incredible opportunities for MLPs. You just have to wait until the decline curve hits the point where decline is in the 5-10% level each year. Each new shale well is a potential MLP well down the line. And these are the kind of wells that the major E & P C corps will want to sell. So, look to see EVEP just continue to bolt on over the years in the Barnett. When, the day comes that NG turns up, this massive base of steady production is going to be very profitable.

 
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