PITTSBURGH (AP) - The wheeling and dealing over the natural gas-rich Marcellus Shale has hit the pause button.
Marcellus mergers and acquisition activity fell to zero in the third quarter of 2012, after major energy companies spent tens of billions of dollars over the last three years, according to a quarterly report today of the financial firm PricewaterhouseCoopers. In the previous quarter, the deals totaled $1.6 billion.
PwC said low natural gas prices were the main factor, not the output or potential of the vast shale gas formation that lies under parts of Pennsylvania, West Virginia, New York, Ohio and Maryland.
"The problem ultimately for the Marcellus is gas prices," said Rick Roberge, a principal in PwC's energy practice. "The Marcellus is the biggest shale play in the U.S. It's got a great future. But it's got one big headwind."
The "headwind" is the Marcellus production of mostly conventional dry gas. That market is glutted.
And the same technology that unlocked the shale gas deposits - hydraulic fracturing or fracking - also works to extract shale oil. That's meant activity in shale oil formations in North Dakota, Texas and other states is booming and the price of oil has not dropped the way natural gas prices have this year.