Replies to This Discussion

Permalink Reply by Joe Aldridge on March 28, 2012 at 7:42

Tom,

If I understand you correctly you are figuring on the vehicle at 12k per year. I average 30k per year. So in my case the difference would seem worth it to convert and I'm considering converting. But the problem as I see it is you guys are figuring the price at $2 - 3 dollars a thousand. That would not be the real cost at a filling station set up to service NG vehicles. So the question is: What would the true price of gas be on a retail basis with the road tax figured in?

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Permalink Reply by Clyde T. Williams on March 28, 2012 at 8:01

I try to get people to use numbers - sometimes as a lightening rod approach - think a bit, put something up and get others to come in

LA DWP hedged large volumes of gas for next 20 years at $6+ when the 3mon price was $3.50 and expected to go below $3 - but that was for very large annual volumes compared to getting MMBtu at the pump - retail

If you are going 30K/yr I would look at LPG at least local mechanics more use to it and pressure tanks are not so critical (Calif won't let me/us have a flex-gasoline/LPG retrro-fit)...fleets are the initial keys - ALL LosAngeles County buses are now CNG, not yet LNG...FedEx/UPS converting also

But for the next five years - LA/TX needs to get the LNG export terminal going for the next 25 yrs and long term contracts to compete with NE-US for the European Markets and get the LA/TX royalties up - 3mon orice say $3-4/MMBtus

Tom

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Permalink Reply by The_Baron on March 28, 2012 at 8:42

Joe:

 

They currently sell CNG at the Bossier City filling stations at $1.71 (yesterdays price).

 

This is a per gallon equivlent , that is, the same btu's of gas as you would get in a gallon of gassoline. So.. the same energy is half the price of standard gas.

 

They also sold E80 @ $3.11/gallon which has about 80% of the btus of a gallon of gas.

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Permalink Reply by Joe Aldridge on March 28, 2012 at 9:03

Thanks Baron,

WOW!!!!!! Just didn't know how to evaluate the actual price. To my knowledge we don't have any NG stations in the BR area yet. I think one of the fleet stations has it but don't know if consumers can buy there. Interesting difference in price though. Thanks again. 

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Permalink Reply by Clyde T. Williams on March 28, 2012 at 9:20

You might try  

http://www.cngprices.com/  or http://www.cngprices.com/station_map.php

For California  we have $1.15 to $2.90/gal

For BR - $1.69-2.52/gal

BUt it shows only BR with gas around you all

Tom

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Permalink Reply by Parkdota on March 29, 2012 at 12:15

Storage is soooooooooo out of wack that I don't see $2.75 any time soon.  I'm beginning to think we will see some active wells turned off, and the only reason for some to stay in production is for hedged contracts or operator cash flow issues.  Chesapeake reportedly didn't hedge for 2012 so I'm guessing they may take this action if anyone might.

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Permalink Reply by Bradley McWilliams on March 31, 2012 at 1:07

I don't know if it's been mentioned in this thread or not, but I have wondered what the inflation adjusted value of gas is.  We have heard "the lowest price in over 10 years", but thats comparing dollar for dollar.  Inflation adjusted, we are surely at record lows. I know that ten years ago you could buy gold for a lot less than you can now, yet nat gas is the same price. 

Parkdota mentioned shutting active wells in. Up here in the F'ville there is talk of shutting in, not completing wells that are drilled, and further cutting back on operations. I don't know if this is just talk or actual plans, but it sure ain't fun to hear...

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Permalink Reply by JHH on March 31, 2012 at 1:12

Sorry, i called $2.20.  looks like i was over optimistic!

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Permalink Reply by Krkyoldhag on March 31, 2012 at 1:57

On the bottom....its already way lower then I guessed.  Chesapeake check this week was $300 vs. the $5000 of this time last year.  Either they shut the well down or it is depleted in 3 years only.  I betting it shut down. 

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Permalink Reply by The_Baron on April 2, 2012 at 8:51

I am betting depleted.

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Permalink Reply by Clyde T. Williams on April 2, 2012 at 9:22

Depleted at the price of $2 maybe - it was economics -it could also be that they just needs to REFRACK of frack the intervening portions of the original frack job...

Tom

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Permalink Reply by Skip Peel - Mineral Consultant on April 2, 2012 at 9:32

We have debated the possibility of "re-fracking" a horizontal Haynesville well.  The consensus was that it would not happen.  Every "re-fracked" well that could be found was a vertical completion.   And I agree with The Baron that depletion is the likely cause of the reduced royalty payment with the price of nat gas being a contributing factor.

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