By Chris Nelder | August 7, 2013, 1:32 AM PDT
The shale revolution is “a little bit overhyped,†Shell CEO Peter Voser said last week as his company announced a $2.1 billion write-down, mostly owing to the poor performance of its fracking adventures in U.S. “liquids-rich shales.†Which of its shale properties have underperformed, Shell didn’t say, but CFO Simon Henry admitted that “the production curve is less positive than we originally expected.â€
Shell was a latecomer to the tight oil game. As late as 2010 it was acquiring mineral rights at inflated prices, predicting that those properties would produce 250,000 barrels per day in five years. Three years down the road, they are yielding only 50,000 barrels per day, and the company intends to sell half of its shale gas and tight oil portfolio. Shell has officially abandoned its production target of 4 million barrels per day by 2012-2018. Instead, Voser said, “we are targeting financial performance.†read more
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