MGM Energy Corp MGMCF

RE:RE:The window of opportunity is now unfortunately

[OilEng]

Henry Sykes has been making the same point.  This opportunity will not last forever.  

I think it is important to differentiate between shale oil and shale gas.  Shale gas has flooded the North American market and there are lot of opportunities to develop it worldwide.  Shale oil is a different matter.  The geologic window for shale is much narrower and hence the amount of shale oil that is economically recoverable is much much smaller.  To use just one constraint the %Ro values need to be between 0.85 to 1.0% to get oil which is producible from shale (volatile oil) while anything greater than 1.0% will give you gas (wet and dry gas). 

To support this arguement, you will notice that the EIA reports shows that shale oil will only increase the world supply by 11% while shale gas increases the world supply by 47%. 

In short, I don't think shale oil is going to flood the world oil market and drop the price like shale gas has done to the NA market and may do to world gas markets.  A much better informed opinion is made by the President of EOG in their lastest presentation.  It is worth a listen to if you have a spare 1/2 hour.

Bringing this back to MGM.  I think that the Mackenzie Delta gas could go ahead if Esso/Shell/Conoco can wrap up long term LNG contracts in the next little while.  This is where I think the window of opportunity argument makes sense. 

However, the CMV is almost completely an oil play with associated gas.  As a result, the oil and not the gas is driving the economics.  I can see the price of oil increasing with time while the world price for gas could well drop with the flood of LNG.  (The world needs to bring on about 5 million bopd just to keep up with depletion and increased demand)

I can see the southern portion of the MVP being built from Alberta to  Norman Wells. The portion to the Delta has a short window as you folks have said.   Perhaps Esso and boys can wrap up long term LNG contacts in the next year or two.