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Why is a Natural Gas Drilling Spot Called a Play?

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Because these companies aren’t so much as investing as they are placing massively uncertain bets?

Kinda get that impression, reading the New York Times piece over the weekend, which cited many troubling communications about the natural gas industry from both insiders at major energy companies and investors who keep an eye on the business. Relatively few wells are paying the dividends expected, and production at some established wells is falling off at an alarming rate, including in our own local Barnett Shale.

And this is scary stuff:

“Money is pouring in” from investors even though shale gas is “inherently unprofitable,” an analyst from PNC Wealth Management, an investment company, wrote to a contractor in a February e-mail. “Reminds you of dot-coms.”

“The word in the world of independents is that the shale plays are just giant Ponzi schemes and the economics just do not work,” an analyst from IHS Drilling Data, an energy research company, wrote in an e-mail on Aug. 28, 2009.

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