ShaleGeo or anyone else interested, wanna call the bottom?

Anyone have any guess where the price of gas will bottom out.  I want to know when to stop holding my breath.

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Permalink Reply by Clyde T. Williams on January 14, 2012 at 15:19

If the leasee got a fixed$$price royalties rather than market rate+plus$$, the royalty is fixed and you get the same pay no matter what the leasee gets for it-if the price drops the leasee gets caught in the spread and would declare bankruptcy....Tom

Permalink Reply by Krkyoldhag on January 13, 2012 at 12:20

It just keep dropping...Today 2.64. 

I heard today from someone who works for a drilling service company that Indigo was going to drill several Cotton Valley wells in Panola and Harrison County asap.

Anyone confirm or heard same ?  and why at $2.64 and dropping?

Permalink Reply by Two Dogs, Pirate on January 15, 2012 at 8:53

CV will have wet gas and that brings in bigger bucks.

Permalink Reply by Clyde T. Williams on January 15, 2012 at 10:57

Get your wets as soon as possible and get long term contracts - remember that wets pipelines from NE US are coming very soon...they have the problems of few wet refinaries/PCProcessors, although they have started permits for expansions and a couple of new plants...but they probably will want to ship to BatonRouge and Beaumont/Houston

You may also remember the NDak and Canadian - Xcel Pipeline will probably use gas and wets to spike the oil, esp. in early phases (same as NSlope Aleyaska), so that in Houston we may see a boom in wets available in the LATX area soon...then NE will have $$price problems and we may see a bust in wets C2+ prices following CH4 prices...maybe $1.80 by the end of year??  Tom

Permalink Reply by kittycatmama on January 15, 2012 at 14:07

Right now Indigo seems to have the local market for drilling wet gas. Will some of the other players like Encana follow suit or farm the shallow to Indigo like Chesapeake has done

Permalink Reply by Two Dogs, Pirate on January 15, 2012 at 15:00

The CHK/Indigo deal would probably have had something to do with the lease on the Martin Timber properties. I doubt that Indigo is seeking to partner up to spend more money on something from Encana when they are trying to look for more investment money to drill what they already have.

Permalink Reply by Spring Branch,mineral owner on January 15, 2012 at 22:38
I understand that Indigo has acquired the shallow rights on some of the sections that SND acquired from Goodrich and that Indigo is talking to Exco Resources about acquiring the shallow rights on some or all of the sections in north DeSoto/South Caddo acquired from Fossil Resources.
Permalink Reply by Krkyoldhag on January 16, 2012 at 4:28

Is Cotton Valley shallow?  That is where I heard Indigo was planning to drill. 

Price of NG still dropping...feels like a crash to me..

Permalink Reply by Spring Branch,mineral owner on January 16, 2012 at 7:18

Yes, Cotton Valley is shallow in relation to the Haynesville.

Permalink Reply by kittycatmama on January 16, 2012 at 6:03

Are their some drillers out there comparable to Indigo that might jump into the wet play

Permalink Reply by Clyde T. Williams on January 16, 2012 at 7:21

Yeah BUT

Need midstream pipelines elsewise things get complicated

As soon as processing for separating wets (or even produced water)...the installation becomes a processors and subject to AQ rules for your state. Separators, compressors,  and pumps change the effort compared to dry gas.  So it ain't a problem for drillers but is a big porblem for producers. In the background, remember that the NE US Marcellus field is producing enough wets to warrant a main transmission pipeline from PA to TX...so you would need to get a longterm NGL contract from a processor as the prices may drop like those of NG 2011-12...I still think those will drop BELOW $2

Permalink Reply by DrWAVeSport Cd1 on January 16, 2012 at 10:28

Good.

When nat gas gets to $2 and GASOLINE gets to $4 plus this Spring, Maybe U.S. will feel the pain and FINALLY force a Nat Gas Based Energy Policy.

Idiots...

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