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Permalink Reply by DrWAVeSport Cd1 on March 1, 2012 at 6:19

Les B,

Per Your Insight...  Does it seem to you that the recent public statements per Producers' cutbacks on production  reflect in the above rig count.  EXCO just recently reported 6 wells in "Sport Times."  I guess, I'm saying, I don't see the rush to get rigs out of the HS even at below $2.50/mcf prices, not in the "way" some Producers are speaking.  They must be drilling here at a great loss at these prices, but are continuing to drill very high $$$ wells.  IMO.  Is this a picture of "do as I say, not as I do?"  

Or... If most HS sections are now HBP'd, Are we seeing more of a "natural" progression of the HS Play?  And, a small precentage of cutbacks per rigs... Albeit, more rigs would be here except for all of the newer Shale Rushes, and nat gas prices @ $5 or $6/mcf.  

Just wondering.

Thanks for the "rig count" info. 

DrWAVeSport Cd1 3/1/2012

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Permalink Reply by Les Bamburg on March 5, 2012 at 5:53

DWS, I think it just takes time for producers to get their rig count down to their stated objective levels.  The rate of decrease varies by operator and depends heavily on their rig contracts and other development plays.  The rig count trend is definitely headed down and could drop below 40 by mid year.

 

Also bear in mind that many producers are still hedged thru 2012 at gas prices of $4.00+ which keeps their current drilling economic. 

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Permalink Reply by DrWAVeSport Cd1 on March 5, 2012 at 18:23

Les B,

Thanks.  With some of the CV horizontals looking pretty good, I thought those wells might keep the rig number up a little.  Too much going on in the oily plays I suppose.

CHK sold our nat gas @$2.380 for December 2011.  But paid me $2.90 (?)  I was quite surprised to get 1st check as a CHK UMO.  However, check was alllllll wrong.  So I am still in negotiations over same.  CHK has agreed that check was wrong for one reason after another but has agreed to rectify things.  We shall see.

I saw where GM is going to have a Fleet Services/Company CNG Silverado for sale next year.  I think Dodge is ahead though.  Here's hoping the "demand" side gets going.

Thanks as always for your help and insights.

DrWAVeSport Cd1 3/5/2012 

 

 

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