The rapid growth of unconventional resources in North America, especially shale gas and liquids, has generated both enormous enthusiasm and deep skepticism. Some have proclaimed that shale represents extremely low-risk, manufacturing-style opportunities, while others question whether it has, or ever truly will, yield the anticipated returns.

The collapse in regional natural gas prices has driven home the marginal nature of these assets, with their substantial exposure to commodity-price risk. This in turn is forcing a debate about how best to allocate sparse capital between conventional exploration programs and unconventional resource ...