Shale in TN & surrounding states. TVA's 160,000 MCFD electric fired generator scheduled to come on late 2011 may kick off a new shale era for TN. Looking forward to TGC's 2 exploratory Devonian test wells later this year which if successful should greatly improve the 65 mile pipeline's valuation.GLTA
Thanks OU- I've heard & have seen print on additional oil in this area F/TGC in the past. I would like to see these guy's test their theories in conjuction w/proving the Devonian Shale. As I initially posted I was surprised to here about them taking on the Devonian Shale @ this juncture(w/oil trading @ a 20 to 1 ratio). IMO TGC has done their homework & have studied the seismic(for yrs in this area-Amoco draped this area before drlg their basement test 30 yrs ago) & are rolling the dice. They have stated there would be exploratory/higher risk wells associated w/the next 14 wells-these are 2 of those wells. GLTA
O and G man, Re the pipeline: that setup (producing gas field...pipeline...customers) is the first thing that made me think these were smart guys at work when I first began to invest in this co. What happened to cause the pipeline to be idle for a time? or did I get a simplistic first impression of that arrangement.
Styro-The gas came before the pipeline in this case. TGC piggybacked off an Amoco basement test circa 1981-2? Amoco made a Knox discovery in the Overthrust @ ~5000' but were looking for something much larger. TGC subsequently picked up the Swan Creek acerage & took on the burden of bringing the gas to market(65 mile pipeline). Originally this discovery and offsets were tapping virgin production but despite the initial flows the reservoir was limited in size & the field production was much smaller then first thought(hence thru put of pipeline was reduced) . If TGC or other players can prove up the Devonian Shale then the pipeline asset will finally yield fruit. With the TVA converting F/coal -T/Gas opens up a huge supply gap(TN produces 16,000 MCFD) & the first plant alone will consume ten times this amount(160,000 mcfd). Although today's gas prices are marginal the future looks bright for natural gas(IMO).GLTA