by Dr. Abe Beagles

Created on: February 03, 2009

SO YOU OWN SHARES IN AN OIL COMPANY AND THEY ARE LOSING MONEY.

Once you understand some of the reasons for high costs of some of their operations you may rethink where you put your money when it comes to oil investments. The companies that are making money whether the oil companies do or not are the service companies that take care of the problems that the oil companies are creating and this article will show you some of those.

This article takes you inside one of the most misunderstood areas of the oil patch to this date. That area is the natural gas wells that are being drilled all over America into what the oil companies are calling Shale Plays. A shale is a zone of the mantel of the earth that was laid down when the US was mostly covered by the ocean back many million years ago. Shale is made up of tiny organisms and plant life that died over a long period of time in the earth's past. These sunk to the bottom of the ocean and over millions of years sediment came in over them and covered them with a layer of dirt. Over more time as the earths crust shifted and realigned itself this layer became trapped under thousands of feet of earth. This created heat and pressure and turned this layer into a stone known today as shale. It is gray to black in color and contains millions of tiny bubbles of natural gas. This is a very tightly compacted rock and is rather hard as rock go.
In the 1980's a man in Texas found that this layer contained enough natural gas to make it possible to extract gas from it when it was fractured. The problem was that drilling vertically only produced a small area of shale that would produce gas. His research took him to think that if he could first drill down to the shale and then drill horizontally into it that this method would give him more surface area to fracture and obtain more gas. This was the start of the technology known today as "directional drilling" and it has led to the tremendous natural gas boom that was brought on by the first large field which was named after the man that discovered it and today it is called the Barnett Shale which lays from 5, 000' to more than 9,000' down in the earth. This field lies in a half moon pattern starting at the border of Texas and Oklahoma at the city of Gainesville. It is known that this zone goes west at least 60 miles and then goes south around Ft. Worth to the south and west to as far as Cleburne. TX and to the west from here about 50 miles to this date. The real boundary has not been determined

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