Are Natural Gas Prices Going to Go Below $2?

By -
From The Washington Post:
Bank of America Corp. says the selloff isn’t over and is telling clients to brace for the possibility of sub-$2 prices for the first time in three years. Gas output will climb to an all-time high of 78.39 billion cubic feet a day this year, an increase of 50 percent over 2005, led by shale reservoirs in Pennsylvania, Louisiana and Texas, government data show. 
The number of gas rigs has tumbled to the lowest level since 1993, yet supply has risen steadily because of improved techniques for extracting the fuel. Natural gas for April delivery settled at $2.92 per million British thermal units at Wednesday on the New York Mercantile Exchange, down from $4.456 a year ago. Futures were last below $2 in April 2012 and haven’t traded there for more than a handful of days since 1999. 
“Production has definitely surprised,” Francisco Blanch, head of global commodity research at Bank of America in New York, said in a March 10 phone interview. “We have $2.25 as our target for a normal summer, but we could see much lower prices with cool weather” that reduces utilities’ demand for natural gas. 
Break Even 
In part of the Marcellus reservoir in Pennsylvania, the nation’s most productive gas basin, the break-even price is 38 cents. Some producers in the nearby Utica shale can make money by selling gas at a loss because of profits earned from gas liquids that flow from the same wells, data compiled by Bloomberg New Energy Finance show. 
U.S. gas output has climbed to a record every year since 2011, driven by gains at shale formations from the Marcellus and Utica to Haynesville in Louisiana, and Eagle Ford and Permian in Texas. Operators in those basins have used techniques such as drilling multiple wells from the same pad to cut costs and boost production. The Energy Information Administration has raised its estimate for 2015 gas production 7.8 percent from a year ago, according to the monthly Short-Term Energy Outlook. 
Supply from the Marcellus may climb to 16.79 billion cubic feet a day in April, up 21 percent from a year earlier, the EIA, the Energy Department’s statistical arm, said March 9 in its monthly Drilling Productivity Report. Utica output may rise to 1.97 billion a day, more than doubling from April 2014.
Click here to read more.

Connect with us on Facebook and Twitter!

Popular posts from this blog

Fracktivist in Dimock Releases Carefully Edited Video, Refuses to Release the Rest

By -
Image
From Energy in Depth: There is something very strange going on along Carter Road, in Dimock, Pennsylvania, and I’m not speaking of natural gas, methane migration, contamination, litigation or even the extensive water testing there by the EPA and others.  No, I’m talking about a new “Watergate” conspiracy, complete with 18 minutes of missing tape (well, video, actually). It seems the ever-present Green Party member and  naturist   Vera Scroggins  (a/k/a  Vera Duerga ) has posted a video of Craig Sautner meeting with the EPA.  Mysteriously, the video is but 14 seconds in length, cutting off conversation in what is obviously mid-stream.  It raises a question Craig Sautner, like  Ronald Reagan in Kings Row , might have asked, “Where’s the rest of me?’  Carter Road, isn’t Kings Row, of course, (at least not until you arrive at  the mansion Scott Ely, one of the Dimock litigants, is building with his royalty money ), but there appears to be a whole lot of film editing going on there to fi
Read more

The Second Largest Oil and Gas Merger - Cabot and Cimarex

By -
Image
       Due to investor pressure, the U.S shale drillers are being pushed to improve financial and operational performance after a few years of poor returns. Even though the industry has improved its numbers, when compared to last year, investors still want more to be done for them to earn more money.      That's why two mid-tier shale drillers, Cabot and Climarex, have decided to merge in order to eliminate $100 million in annual costs, which means more money for the investors. This all-stock transaction is valued at about $7.4 billion, which is relatively high for the oil and gas sector.      The new entity will be renamed and the headquarters located in Houston, Texas. Cabot shareholders will own 49.5 percent of the new entity, and Climarex the rest.       The Cimarex-Cabot merger will address the investor's demand for a higher amount of returning cash. The initial plan is to pay a 50-cent-per-share special dividend on closing the deal while offering a quarterly variable div
Read more

Do You Know The History of Fracking?

By -
Image
  In 2018, 59% of total oil production in the U.S came from hydraulic fracking, which means it accounted for more than two-thirds of domestically manufactured gas. By 2024, fracking will reach an astounding $68 billion market value! Of course, fracking is not a new drilling method as you can trace it back hundreds of years. That's why we want to consider the history of hydraulic fracturing (fracking). We will be stating historical facts about it and focusing on the major historical occurrences that have influenced modern-day fracking. Pre-Fracking Days The idea of fracking started back in 1862 when Edward A.L. Roberts (Civil War veteran) witnessed Confederate soldiers exploding artillery rounds into a canal that obstructed a battlefield. At the time, Edward A.L. Roberts called it superincumbent fluid tamping. On April 26th, 1865, Edward A.L. Roberts began experimenting with exploding torpedoes, which consisted of lowering a torpedo containing an amount of powder from fifteen to tw
Read more