Chindia Natural Gas Consumption

It's one of the clearest trends on Earth today... Earlier this month, we reported China imported 30% more natural gas in the first 11 months of 2010 than the same period in 2009. India's natural gas demand is also soaring. Take a look at the natural gas consumption in China and India (aka "Chindia") over the past 25 years. You'll notice a pattern...

We'll bet demand only increases this year. And China's betting more than $1 billion on the same result... Today, Chinese oil giant CNOOC announced it is buying stakes in several shale oil and gas leases owned by Chesapeake Energy for $570 million. The deal entitles CNOOC to a 33% stake in Chesapeake leases covering 800,000 acres in northeast Colorado and southeast Wyoming. CNOOC will also fund two-thirds of Chesapeake's share of drilling and other costs up to $697 million.


The deal is similar to the October 2010 CNOOC-Chesapeake arrangement where the Chinese company bought one-third of Chesapeake's 600,000-acre Eagle Ford shale project for $1.08 billion. (This marked the first major investment by a China state-run company in onshore U.S. energy reserves.) Matt Badiali's Resource Report readers bought into Eagle Ford long before China. (Our friend Cactus Schroeder – a Texas wildcatter – told us about the development.)

Last July, Matt told his readers:

As you may know, drilling shale formations like the Eagle Ford for the natural gas trapped inside has been the most important trend in the U.S. energy sector over the last decade. Developing the tools to extract shale gas is singularly responsible for an explosion of U.S. natural gas reserves. Now, oil and gas explorers are applying those tools to the biggest shale formation in Texas. I'd love to give you some firm figures on the potential Eagle Ford production. But drilling there is so new, it's impossible to make a reliable estimate on how much oil and gas it holds. Just know that the Eagle Ford is going to be a monster. One of the oilmen I rode with said it will easily be the biggest discovery of his more than 30-year career... and maybe the largest in the history of the U.S. oil industry.

Matt recommended EV Energy Partners and Vanguard Natural Resources as Eagle Ford plays. In six months, readers ar e up 40% and 55%, respectively. More gains are on the way... and both stocks yield more than 7%.