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As Supplies of NGLs Balloon, Ernst & Young Sees Profits Deflating

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By Darren Barbee, Hart Energy
October 24, 2012

Nine months ago, natural gas liquids (NGLs) seemed like a sure thing for producers.

To boost profits, the oil and gas industry spent the past few years going through a shale-gas makeover as hydraulic-fracturing techniques advanced. Part of that transformation was a shift to liquids-rich gas and away from dry natural gas.

The bounty has been good; maybe a bit too good.

A mounting supply of NGLs has created a steep discount this year, weakening the profitability of a key driver of U.S. shale development, according to an Oct. 22 ...


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