If all these shales around the country are going to be productive, I think the price of natural gas could drop precipitously. Lower supply, though, would mean higher prices. My main fear is gas goes back down to $3.
How many people have been approached to actually sell their land? Seems like a decent strategy might be to sell the whole thing for a large upfront amount whose present value is based on an assumption for much higher prices for gas.
Shag, I don't know if your statement is correct about cars not running on NG. About 10 years back I read about the Army contracting Texas A&M and a large corporation to build a device that the Army could put on a NG well in battlefield conditions that would turn NG into the JP fuel that the military burns. I talked with one of our attorneys that had retired as a higher up with Shell and he told me that Shell had something that would do the same thing but that the price of gasoline would have to go up to make it profitable. Like I say this was 10 years ago when the price of gas was cheap.
I heard a story of a farmer in Red River that leased for 1 Million and then held the check for several months. When contacted and asked why he had not cashed it he told them he changed his mind and decided to sell the O & G rights. Settled for 22 Million. I don't know how much land he had. But in my thinking, he may have made a good deal. Maybe not for his heirs, but then again who really knows. Bird in the hand or two in the Bush?
yes gas may go down; however, remember the tensions in the mideast? T Boone Pickens says we could be looking at 200 $/barrel oil in the near future and natural gas is the only thing we have to replace foreign oil as a fuel for our vehicles! all it will take is for one of those nuts in the middle east to do something stupid and you will see nat gas increase in price. these companies know what they have found and are looking at the long term value!
the production companies will control what comes forth from the wellhead.
if you don't think that this will then effect and thus control the price, well think again.
these companies have no economic incentive to flood the market with cheap gas.
their goal will be to keep the production in one field going on as long as they can profit from it.
then, they will move to the next field and continue their pattern of making billions of dollars.
it is, the American way.
I don't know if anyone else saw the same commerical I sas a week or two ago by UPS, but they have some of their trucks fitted and now running on ng, and said that in some areas filling stations are converting a part of their station over to fill up the tanks of all who have the need, somewhere up north I am sure.
I don't know how anyone else feels about things here, but my ideas are a little different than most, we should demand that a ng line be piped down every road in this State in front of every house so that all could have access if wanted or needed, before it is taken out of State or Country. LP is so high and alot of people have no choice. I just have this thing about taking care of our own first. Just my two cents worth, sorry if its too stong for some.
Jim in Bienville Parish
Shaq, be sure to read CHK ceo's statements in Washington DC today and this linck to The Nightly Business News Chesapeake CEO McClendon interviewed on Nightly Business Report 30-Jul-08. He is talking about compressed ng at gasoline stations and filling up your car at home on gas etc.
Posted by VSC 'O' on July 31, 2008 at 1:48am
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As exciting as this is, we know that we have a responsibility to do this thing correctly. After all, we want the farm to remain a place where the family can gather for another 80 years and beyond. This site was born out of these desires. Before we started this site, googling "shale' brought up little information. Certainly nothing that was useful as we negotiated a lease. Read More