UPDATE 2-Hurdles ahead for global shale gas–Chesapeake CEO

* CEO says world will not be oversupplied with shale gas

* CEO says global gas search down to 15 locations

* Shares down more than 5 pct

(Adds details on shale formations, stock price)

HOUSTON, Feb 4 (BestGrowthStock) – Large oil companies such as
Exxon Mobil Corp (XOM.N: ) snapping up shale-gas acreage overseas
will likely find it hard to develop that land due to
constraints such as infrastructure availability, the CEO of
Chesapeake Energy Corp (CHK.N: ) said on Thursday.

“I think they will have a hard time over there at the end
of the day,” Chesapeake Chief Executive Officer Aubrey
McClendon said at the Credit Suisse Energy Summit in Vail,

McClendon, whose Oklahoma City, Okla.-company secured the
right to drill for natural gas on 14 million acres in shale
formations in the United States, said it will be hard for the
oil majors who lost out in the domestic rush to catch up

“I don’t see the world being swamped by shale gas in the
next 10 years,” McClendon said in remarks broadcast over the

He noted he has yet to see a formation overseas that has
the potential to rival those found in the United States.

To successfully develop a shale gas basin a company needs
infrastructure such as processing facilities, indigenous demand
for gas and favorable commercial terms. Without those factors,
many basins around the world are eliminated right away, the
executive said.

In fact, Chesapeake and its joint venture partner Statoil
ASA (STL.OL: ) have narrowed their search for an overseas shale
play to about 15 basins, down from an initial survey of about
200, McClendon said.

Exxon and ConocoPhillips (COP.N: ), the third largest U.S.
oil company, are building big acreage positions in countries
such as Poland and Germany in a search for formations that hold
vast amounts of natural gas.

Chesapeake shares fell more than 5 percent, or $1.41, to
$24.42 in afternoon trading on the New York Stock Exchange.
That decline compares with a drop of about 4 percent in the
Philadelphia Stock Exchange’s index of natural gas companies
(.XNG: ).

Stock Today

(Reporting by Anna Driver in Houston; editing by Andre

UPDATE 2-Hurdles ahead for global shale gas–Chesapeake CEO