Replies to This Discussion

Permalink Reply by kittycatmama on June 10, 2011 at 9:14

WHAT IF we got a major hurricane in the Gulf & it took out some gas wells indefinitely

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Permalink Reply by adubu on June 11, 2011 at 4:27

kitty---- IMO would not have any major long term effect today on supply like it would had 10 years ago. Maybe  see short few weeks effect with spike in prices, but the decrease demand useage along Gulf coast would off set the short term decrease in supply.

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Permalink Reply by ALongview on June 10, 2011 at 10:14

Jay,  I keep hearing this and know that there is a lot of gas but how come we are below the year on year storage numbers and below the five year storage average and rigs are down year on year and we still say we have so much gas.  Where is it?  In the ground still? Shut in wells?

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Permalink Reply by adubu on June 10, 2011 at 10:22

AL---storage down due to record cold winter and big draw down during the winter 2010-2011. You are correct NG rig count down greater than 100 as compare to 12 months ago. However total NG production has increased every year recently-- 2008 + 5.9%-- 2009 +3.7%---2010 + 4.4% and 2011 projected + 2.3% . If rig count continue to drop then production will drop and NG price will improve as I predict below.

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Permalink Reply by adubu on June 10, 2011 at 9:49

"Parker"--I think we will see $5-5.5 avg 3rd qt of year with slow increase to 5.5-6.0 over next 12-18 months. Reason it's going to be hot summer and another cold winter. There will be no nuclear power for many years to come. Wind is not the answer and dirty coal will decrease in use. There will be change from crude oil to NG as transportation fuel. In future 10 years out the US will be major player in export of LNG and then we will have new ball game. NG is fuel of the  future and prices will go up with it. :))For the short term next 12-18 months beside weather that drive prices up slowly; The dry shale plays acreage is getting close to one well per unit in all core area to HBP the leases. Minimal drilling will be done on the edge of play for wells at $4-5 to only  pay out over 10 years. Rigs are moving out to chase liquid gas shale like Eagle Ford, etc. from dry gas fields such as haynesville/bossier. This will result in a decease in supply since these shale wells get long in the tooth very quickly. You may see a slight increase in vertical drilling to drill out some unit in the cotton valley in east texas and other similar vertical plays since cost much lower and can make return on investment on $5 NG but not on Horizontal well. These are some opening thoughts to your question. "Parker"-- comment back your thoughts????

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Permalink Reply by adubu on June 10, 2011 at 10:05

No NEW Nuclear power that is-----

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Permalink Reply by VSC DeSoto South on June 13, 2011 at 2:12

Do you have any guesitmate when they would start building out? Hypothetically a unit has 1 good well now so they are HBP. How many years before they begin alt wells to build out, 3 or 5 or 7 or 10? How many years before they start going after Bossier shale, 3 or 5 or 7 or 10?

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Permalink Reply by kittycatmama on June 13, 2011 at 2:59

Jay, Encana is also doing  8 wells per section in the Holly

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Permalink Reply by adubu on June 13, 2011 at 3:47

VSC----- It depends on the operator plus NG needs to be $6-7 price and stable in that range when gets there a prediction it will stay in that range for at least 2+ years or higher. How long before we see that price is the big question??? IMO 3-5 years maybe sooner if Obama gets fired!!!

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Permalink Reply by Hopeful About Natural Gas on June 13, 2011 at 8:40

Good analysis adubu.  I copied your response for future reference. I am not a trader or anything. But, I do like to try and understand broad future price movements.

 

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Permalink Reply by adubu on June 13, 2011 at 11:10

Hopeful---since you copy my reply for future reference throw it back to me in few years to see how close I was and if I was right on correct, better  or just dead wrong. Also Hopeful IMO you have no worry that shale drilling will effect or hurt the environment in any way. The "Tree Hugger" Fear  demagogue will  hurt it more by restrictions based on Junk Science.

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Permalink Reply by adubu on June 13, 2011 at 11:32

Hopeful--- also I am not a analysis or anything either. The opinion are simply  based on reading lots of news and journals and IMO.

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