What will HShale play become when gas is at 13.00 again?
I have read some great postings on this site. Some good answers from some insightful people. I am pretty ignorant about the mineral stuff, but you have really helped me to become less so.
I have a question, bugging me and I invite your insight on it.
What do you thing the landscape in the HS play will look like if in the next five years the price for gas goes back up to the 13.00 mark. It seems to me there will be a lot of differences in how it plays out, but I just don't know what they would be.
I know that one major difference will be in the level of education on the part of land owners, making them more respected by the O&G, but what all else will change?
What do you think? Please!
I have a question, bugging me and I invite your insight on it.
What do you thing the landscape in the HS play will look like if in the next five years the price for gas goes back up to the 13.00 mark. It seems to me there will be a lot of differences in how it plays out, but I just don't know what they would be.
I know that one major difference will be in the level of education on the part of land owners, making them more respected by the O&G, but what all else will change?
What do you think? Please!
Views: 107
Replies to This Discussion
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Permalink Reply by Skip Peel - Mineral Consultant on -
Hello, Pete. And welcome. The price of natural gas is one of the most important factors in our unconventional resource play (HS). The high cost per well associated with the depth, reservoir pressure, technical expertise to drill laterals and fracture the formation makes the price of natural gas one of the main development factors. No one can accurately predict the future price of natural gas. But $13 per thousand cubic feet is not required to continue that development. Major producers employee hedging as a protection against short term drops in the price of ng. Though monitoring the daily price of ng may be of some interest, the real determining price factor involves operators' ability to make and maintain good hedge positions. You will see posted here on the site periodically the quarterly corporate operating reports that are given as guidance to investors and analysts. Those reports often make note of the hedge positions of the reporting company. Hedge positions for the long term guaranteed price of gas to specific end users helps to smooth out the price volatility inherent in the ng industry. Keep in mind that unlike crude oil, ng is a local commodity. You can't truck it off in a tank truck and it is expensive to convert to liquefied natural gas (LNG) for transport overseas. It is tied much closer to domestic demand. And supply and demand are the main determining factors of price. I think that you will find that if one issue units the many varied personalities and political persuasions of our members, it is support of compressed natural gas (CNG) as a vehicle fuel. It makes good sense for national energy policy and helps the demand side of the equation. Natural gas can be used for energy needs beyond vehicle fuel. Many industrial requirements can be met through the use of ng, especially electrical power generation. Shale deposits capable of producing prodigious quantities of natural gas appear to exist in much of North America, and around the world. It is a resource that has come along just at the exact time that the world needs it most. We should all lobby our local, state and national leaders to commit to a new national energy policy with natural gas as its centerpiece. I'll climb down off my soap box now. I hope my thoughts were a help. Regards, Skip
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Permalink Reply by Coyote Ugly on
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Skip, thank you for you great answer. Another bonanza of knowledge for me to absorb.
Pete
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Permalink Reply by Skip Peel - Mineral Consultant on
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Your welcome, Pete. It's good to have you on the site. There is a wealth of information gathered here by Haynesville. I suggest that you explore all the content, not just the discussion threads. There's a lot of good info here. And many members have given of their knowledge and time to make it available to all. Let your curiosity be your guide.
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Permalink Reply by ALongview on
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If they don't come up with a new market or turn around the worldwide economy, gas will struggle to reach 13.00. If they do come up with a new market like transportation for example then the price of gas will rise. If it did hit 13.00 then the companies in the field will probably be fighting a lack of materials like steel rather than the lack of a market for all the excess gas. Everything changes if gas hits a high price because of the right reasons like simple supply and demand and not for the wrong reasons like government regulation.
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Permalink Reply by Ron Jon on
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I personally would love to see that price; however, I don't believe it is likely. Not suggesting this is correct but see http://www.gohaynesvilleshale.com/forum/topics/natural-gas-price-co...
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Permalink Reply by Coonman on
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How mch were lease bonses in the Barnett Shale when gas prices where at $7.00 or even $6.00?
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Permalink Reply by P.G. on
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I heard Pickens say that OPEC will get oil prices back up to around $100/barrel in about a year. He said they know that our economy can still function at that price and people will readily pay that for it. He said they found out $150/barrel is too high. That will provide more incentive to use NG for a transportation fuel.
Like others have said, until more markets open up for NG, there won't be much need for all the gas that can be produced and prices will stay flat.
Pickens said he optimistic that Obama will use NG to achieve our independence from foreign oil.
(I just hope Obama don't use this recession as an opportunity to nationalize OGs)
What would the odds be he could declare all minerals the property of the people and not individuals?
(in socialism, individual rights take a back seat to the welfare of community)
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Permalink Reply by Bill G on
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He got elected, No one would have bet that two years ago when he said he was running against Hillary. Now he (Barack Hussein Obama) is president elect. This shows he can do anything he wants. Remember, it would be simple to make the minerals property of the people! All it is is a bill and a vote. It can Happen, if he makes that his focus! Anything can happen if he makes it his focus!
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Permalink Reply by Coyote Ugly on
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That is scary. REALLY scary!
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Permalink Reply by The_Baron on
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It could happen. Many people are not aware that the United States is on of the few countries in the world where private citizens own their mineral rights. (or water rights for that matter).
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