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For the rest of the story...
http://moneymorning.com/2011/04/08/rising-natural-gas-demand-turns-...
Anyone who foresees a near term increase in gas prices is probably smoking something prohibited. We now have more than three large natural gas fields in production or soon to be in production. (Haynesville, Fayetteville, Marcellus, Bakken, etc.) Here in NW Louisiana, most leases have now been unitized and drilled. For most lessors, that means that their minerals are Held By Production. Nearly all of the gas wells are throttled or choked back. And even though many companies have applied for and received permits to drill additional holes in units they hold, few of them plan to do so until the price of gas increases, or the original "unit well" is exhausted.
Currently, we can see heavier leasing activity in Sabine Parish, as the companies lease, drill, and hold those minerals. We can also see the evidence of multiple pipelines--including the huge 42" Acadian line to Napoleonville--throughout the area. I do not anticipate any gas price run-up until the country begins to switch to NG fuel for automobiles, and begins to package LNG for export. Right now, and for the immediate future, gas supply is coming on line faster than demand is increasing. An equilibrium in that equation should take several years.
But not to worry. The gas is still there. If you don't get the benefits, your children or grandchildren will.
Re: "... we may well see an increase in drilling on existing acreage ..."
I was told by a Chesapeake employee several weeks ago that Chesapeake currently plans to eventually drill eight (8) wells per section.
That is sweet. But the kicker is that word "eventually". The original boom was to get the minerals leases done, and locked in with one producing well. Additional wells can be drilled (or not) at any time after that is accomplished. There is no hurry to do so, once a section is in production. (Except for those few cases where a mineral owner may have negotiated a unique leasing clause.) Even if they drill them, there is no hurry or need to produce additional wells until the market price is propitious--the drillers can simply shut them in until they deem it profitable to produce.
Personally, I am willing to wait for higher prices before the oil companies begin to drill and produce my minerals.
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