NatGas Prices Hit Below Profitable Levels for Midcon E&Ps
Fed Survey: NatGas Prices Hit Below Profitable Levels for Midcon E&Ps
Even as natural gas prices go low, gas-focused basins may see a favorable shift in the current market if crude prices go down, an analyst says.
Natural gas prices have fallen below what Midcontinent producers consider a profitable level, according to the Kansas City Fed’s First Quarter Energy Survey released April 11.
The average price required to make a profit was $3.80/MMBtu, according to the surveyed companies. Answers ranged between $2/MMBtu to just over $6/MMBtu.
The Henry Hub closing price on April 14 was $3.32/MMBtu.
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Permalink Reply by Skip Peel - Mineral Consultant
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I have not read anything recently regarding breakeven prices for Haynesville operators but there may be some announcements in up coming corporate presentations. The Kansas City Fed covers a wide area of the country with many different natural gas producers and that's why the range is so wide in breakeven prices. If things haven't changed much for Haynesville focused companies I would think that their breakevens fall in the $3.30 to $3.70 price range. That is a major reason that Haynesville operators have been making public statements about needing $5 gas to incentivize an increase in drilling.
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