(p. B5) Even natural-gas companies can’t resist the draw of $100 oil. Though prices for both natural gas and oil have risen steeply, oil fetches nearly twice the price of gas per unit of energy and brings fatter profits.
That is prompting even the most natural-gas-focused companies to step up their oil drilling in the U.S. With the biggest, easiest-to-get deposits of domestic crude oil drained long ago, U.S. energy companies in recent years have concentrated most of their domestic production efforts on natural gas. Some companies, such as Chesapeake Energy Corp. and EOG Resources Inc. devoted nearly their entire production to natural gas.
EOG recently announced it had begun drilling for oil in Colorado and Texas, including in the Barnett Shale, a vast hydrocarbon reserve that had previously been known for gas, not oil. With prices rising faster for oil than natural gas, “you’re probably better off searching for oil,” said EOG Chief Executive Mark Papa.