The stock is worthless? Hardly. Chesapeake is one of the lowest cost producers in the business. Now their MARGINAL property might not be worth it to develop. But if natural gas goes to $20 per mcf - more in line with international LNG, Chesapeakes stock will triple (or more). Natural gas is less price elastic than oil so demand destruction will hurt low cost producing nat gas stocks less than it will oil stocks (and most US oil producers now have very high costs). What portion of our 21 trillion cubic feet of production is near the upper quartile of cost structure is an interesting question indeed....

Your assuming they don't suffer the receding horizons problem. It seem fairly clear that we are past peak net energy as energy declines everything including energy extraction becomes increasingly more expensive. From what I've seen costs seem to be increasing inline with price with no net increase in profits. If they are not profitable now they won't be at any price.

From now on out price increases simply will not change the net profitability of unconventional natural gas extraction or extreme oil plays for that matter.
Also because of the short lifetime of shale plays and the need for ever more rigs they basically have to pay current energy prices esp for things like pipelines to service the newer shale plays. They cannot depend on long lasting older conventional plays to create large profits.
The current high profits for oil and gas companies can readily be attributed to older fields and infrastructure put into production when oil and gas was cheap.

In fact the shale plays are probably our canary in the coal mine for detecting the EROEI cliff and will be the first ones over it as exploding costs make them unprofitable at any price. If you think that some magic price point suddenly makes things better then you don't understand the EROEI cliff.

If you think that some magic price point suddenly makes things better then you don't understand the EROEI cliff.

I'm not sure I understand. By EROEI cliff do you mean that below some figure greater than one, profit disappears because expense of production rises so high that no price can be had that will make it profitable? If you mean that, then it's almost a tautology. It is true that ultimately oil and NG will, at some point, remain in the ground because there will no longer be an economy or society that can afford to lift it. But are we there yet?

By EROEI cliff do you mean that below some figure greater than one, profit disappears because expense of production rises so high that no price can be had that will make it profitable? If you mean that, then it's almost a tautology.

If the EROI is less than one and you use natural gas to produce natural gas you have to buy more gas than you sell.