Replies to This Discussion

Permalink Reply by Randy on September 4, 2009 at 2:45

Storage is going to fill up early for sure. However most of the people I've talked to, who get paid to give their advice on the subject, are saying we should see some comfort in gas prices come 1Q and it will get increasingly better every quarter. Nothing like $7, but $5 is in the realm of possibilities.

Production is dropping every month, decline curves are kicking in pretty steadily. The only thing I'm concerned about is the impact of them bringing shut-in wells back online as pricing recovers. It may be easy to shoot ones self in the foot.

I don't see up dropping below $2 on NGV, but my eyes are on the Dec & January contract.

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Permalink Reply by Les Bamburg on September 4, 2009 at 3:03

Adubu, there will not be any lost wells as operators do not shut-in sensitive wells. Some drilled wells are currently not being completed. I do not foresee rig count dropping substantially as some drilling is still necessary.

The challenging months for natural gas prices are October & November. With the onset of the natural gas withdrawal season in the 2nd half of November, gas prices will begin to recover for December.

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Permalink Reply by The_Baron on September 4, 2009 at 3:15

My predictions:

You will start to see more curtailments, wells will be choked back in order to produce less. Some wells will be shut in. I expect the rig counts to drop nationwide, but not so much here. I believe that the HA is different, as operators are trying HBP leases. You will see more of the operators drilling the vertical leg, shut in. also more of the waiting on pipeline status.

I don't think prices will go below $2, but I will be surprised to see anything over $4 for the next 12 months or so, baring an unforseen disaster (like a cat 4-5 huricane in the gulf).

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Permalink Reply by adubu on September 4, 2009 at 5:20

The last cat 3-4 hurrican in gulf last year (IKE) hit lots of production but NG prices fell because demand from onshore damage fell > production drop. So hurricain double edge shord.

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Permalink Reply by Dion Warr, CPL on September 4, 2009 at 5:26

IKE? You mean Gustav?

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Permalink Reply by adubu on September 4, 2009 at 5:38

Both---Ike hit Galveston and Gusta more to the East in La. area. Believe Ike hit more gas productive platforms. You could have predicated after Gustav (Russian) that the next hurricain named Ike that the "General" would follow after the Russian.

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Permalink Reply by The_Baron on September 4, 2009 at 8:12

All depneds on the amount of damage. Gustav did very little damage to the main production platforms and termimals.

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Permalink Reply by Martin on September 4, 2009 at 9:18

This will cheer ya'll up. I knew it just pegged my optimism meter for NG price recovery. just read on the Houston Chronicle web site that the Sabine Pass LNG terminal is expecting two LNG tankers within the week. The terminal partnership said the first tanker load may be kept in storage for reexport, depending on domestic and international prices. The terminal partner that owns the second LNG delivery does not comment as to detail business plans.

PS. Lets skip the hurricane scenario. I finally got my roof straightened out from the last one -- tree fall and lots of wind damage.

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Permalink Reply by adubu on September 4, 2009 at 9:27

sad thing Qatar can del LNG at $2.50 USA and still make good profit. The USA needs to start exporting LNG

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Permalink Reply by The_Baron on September 4, 2009 at 9:43

Qatar can either export the lng or flare it. might as well make a couple of bucks.

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Permalink Reply by red rider on September 5, 2009 at 18:52

my suspicion on nat gas is it will likely go below $2 too. but not for long. but once the demand comes back, not sure when, prices will triple or quadruple or skyrocket after that, and not come back down for a while. it will go up for years when prices come down , demand has to come up, population increase alone should warrant a price increase. combined with cold weather.

Uh lets see here. a US or even World population increase and a finite resource. do the math. it can't stay this low forever.

which comes back to your contract with oil/gas companies. take the contract to a lawyer and negotiate the best deal you can, so you are rewarded. when gas/oil prices are good or bad.

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