"Chesapeake said all U.S. gas-storage facilities will probably be full by the end of this year..........."
http://www.chron.com/disp/story.mpl/business/energy/6562565.html
The largest U.S. natural-gas producers may be doing too well at the wellhead for their own good, pumping so much of the heating and power-plant fuel that prices won't soon recover from last year's market collapse.
XTO Energy Inc. and Devon Energy Corp., two of the five largest producers of U.S. gas, on Wednesday reported record output and smaller declines in earnings than analysts estimated. Anadarko Petroleum Corp., London-based BP Plc and Chesapeake Energy Corp. previously reported second-quarter output gains that helped them beat estimates.
Even as they lament a gas glut, the companies have been reluctant to let revenue and profits fall further in the short term by being the first to curtail output. Second-quarter production at Fort Worth, Texas-based XTO jumped 32 percent, and Devon of Oklahoma City had a 12 percent gain.
The largest U.S. natural-gas producers may be doing too well at the wellhead for their own good, pumping so much of the heating and power-plant fuel that prices won't soon recover from last year's market collapse.
XTO Energy Inc. and Devon Energy Corp., two of the five largest producers of U.S. gas, on Wednesday reported record output and smaller declines in earnings than analysts estimated. Anadarko Petroleum Corp., London-based BP Plc and Chesapeake Energy Corp. previously reported second-quarter output gains that helped them beat estimates.
Even as they lament a gas glut, the companies have been reluctant to let revenue and profits fall further in the short term by being the first to curtail output. Second-quarter production at Fort Worth, Texas-based XTO jumped 32 percent, and Devon of Oklahoma City had a 12 percent gain.
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Replies to This Discussion
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Permalink Reply by The_Baron on -
Summary
Working gas in storage was 3,089 Bcf as of Friday, July 31, 2009, according to EIA estimates. This represents a net increase of 66 Bcf from the previous week. Stocks were 580 Bcf higher than last year at this time and 496 Bcf above the 5-year average of 2,593 Bcf. In the East Region, stocks were 146 Bcf above the 5-year average following net injections of 56 Bcf. Stocks in the Producing Region were 272 Bcf above the 5-year average of 796 Bcf after a net injection of 9 Bcf. Stocks in the West Region were 78 Bcf above the 5-year average after a net addition of 1 Bcf. At 3,089 Bcf, total working gas is above the 5-year historical range.
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Permalink Reply by sesport on
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Hey, Baron .. I've been wondering where you've been. Of coursse, today IS the day for that "roller coaster" report. Thanks! :0)
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Permalink Reply by sesport on
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Thanks, intrepid.
Downside - Gas glut keeps those prices down.
Upside - Makes gas more attractive as a fuel for power, industry and, of course, transportation fuel. Bring on the NGVs!!!!!!!
Downside - at some point it MAY slow down the drilling and producing (somewhat), MAY slow down acreage acquisition, too
Upside - mineral owners have a reprieve to continue to get their ducks in a row, presents an opportunity to "buy low, go long"
Just MHO, it will get done all in good time.
Oh, and IANAL nor an industry insider nor an investment advisor. (This discalimer keeps getting longer & longer. LOL)
:0)
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Permalink Reply by Dion Warr, CPL on
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Sesport:
Will slow acreage acquisition down (less and except unit infilling). Many units will probably remain at 1-2 wells per unit (per HBP strategy).
Production will be maintained just by virtue of generation of production capacity by drilling additional wells from HBP strategy.
Look for market-constricted shut-ins and pipeline-limited production rates at least until Energy Transfer's 42" starts coming online and other gathering bottlenecks are worked out at the field level.
If the economy improves and/or we start finding a way to consume some ng besides power generation and industrial use, watch out.
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Permalink Reply by sesport on
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I've gotta go find Mmmarkkk and see if he's feeling volatile enough today to fire up his grill. lol Can't have those shut-ins. :0P
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Permalink Reply by Grillin' - MmmMmm on
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Dangit sesport...now I was being all calm and collected but those fools in D.C. approved that loser judge for the SC (her rulings overturned more than supported) and they added another $2B for that clunk a junk program!!
Look to the south...that orange glow will be my grill hooked up directly to a HS well!
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Permalink Reply by P.G. on
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I wonder how many companies will extend their lease options on undrilled leases if prices continue to stay low?
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Permalink Reply by Les Bamburg on
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Intrepid, the traditional end of the gas storage injection season is early November. The highest historical gas storage levels were ~ 3.5 Tcf but many believe our current max capacity is 3.9 - 4.0 Tcf. The rate of decline in US gas production and increase in LNG imports will determine how quickly we hit 3.5 Tcf and determine if we actually have additional storage capacity. The period from late September to early November is going to be very interesting.
"Fasten your seatbelts, it's going to be a bumpy ride."
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