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Permalink Reply by Bill R on August 15, 2018 at 11:19

Basically crossing fingers and hoping that expanding drilling in the Permian will increase production in the Haynesville since the two seem to have been going hand-in-hand for years now. With some of the calls from Landmen and O&G Agents, it makes wonder if something bigger is in our future.

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Permalink Reply by Skip Peel - Mineral Consultant on August 16, 2018 at 2:43

Actually the associated gas coming out of the Permian is set to cap gas prices in the Haynesville Basin when the new pipelines increase takeaway capacity.  When the Permian gas reaches the Gulf Coast prices will improve for those operators and provide an incentive to flare less and pipe more.  As a "by product" associated gas is profitable at prices far less than the break even for Haynesville gas.  What Haynesville lessors should be pulling for is increased demand to offset all the rising supply.

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Permalink Reply by Bill R on August 16, 2018 at 15:21

Thanks for the update Skip... sounded good until you explained.

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Permalink Reply by Skip Peel - Mineral Consultant on August 16, 2018 at 15:32

It is what it is, Bill.  The good news is that natural gas demand has increased more than expected over the last year.  Still it has not caught up with the rising supply.  That may take until early next decade.  In the long run, low gas prices help to displace coal fired generating plants, incentivize companies to invest billions in additional LNG export facilities and make it profitable for the chemical industry to build new plants and enlarge and modernize existing ones.  All good unless you need to live on a royalty check for natural gas production.

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Permalink Reply by Bill R on August 16, 2018 at 16:06

Meh... the royalties just keep my fishing lure collection up... as long as I can afford to buy a lure or two a month, I am happy... the rest is just entertainment... cannot imagine having to rely on them to live on.

Thanks again ><(((({ * ,>

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