Opinions on shutting in NG wells

With these really low NG prices, what's your thoughts on which operators will most likely shut-in their NG wells? Will the recently drilled big CULs be turned off? Will the old vertical wells stay on? Will the big boys keep "pullin'" or choke down? Will the smaller operators have no choice but to keep producing at these low NG prices?

Tags: NG, low, operators, prices, shut-in, wells

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Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on February 19, 2016 at 13:42

Many companies have gathering contracts that require them to provide minimum volumes or pay a standby fee.  Each company has a certain amount of production required to maintain a level of cash flow.  The companies' internal operating requirements dictate decisions to shut-in production not the type of well, vertical or horizontal CUL.  Even companies headed to bankruptcy must generate enough cash to pay royalty interests, if not they may lose the lease.  So far bankruptcy courts have been cooperative in allowing companies to continue producing and paying royalty.

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