When will NG price hit $5.00

We are seeing a new trend of earlier and colder Winters. The price of NG is starting to climb. The question is: When will the price hit $5.00. May be before March 1st. Any other guesses? 

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Permalink Reply by Skip Peel - Mineral Consultant on December 18, 2013 at 9:25

Anadarko has been drilling steadily in Panola for a couple of years now.  They have maintained 5 to 6 rigs drilling during that time.  The wet Haynesville wells are marginal producers but APC holds the leases, the wells are low risk and relatively cheap to drill for horizontal wells.  Whomever you are talking to doesn't subscribe to a rig report.

Permalink Reply by shorty on December 4, 2013 at 6:10

You're crazy if you think anytime soon.  We found so much gas in the US that we're going to be exporting it

Permalink Reply by Clyde T. Williams on December 4, 2013 at 6:54

That is why NE and Louisiana/Texas are trying to get LNG exports and pipelines in place so that producers can open their valves, everyone waits til it gets over $4.25 then open up then at $3.75 they close back down and wait...til we can get LNG exporters going...then we will need to get PetroChems up and operating because of NGLs which storages are full and no one wants to buy enough to get the NGL prices about $40...

Welcome to the market places (LA/TX, NE-US, Pac-US, and the World)

Tom

Permalink Reply by Two Dogs, Pirate on December 11, 2013 at 14:29

Exporting it will help the producers  bottom line thus earn them the funds to drill more wells. Until the price of NG is traded on the world market will the mineral owner see that increase in price. I would think that many leases wouldn't cover that situation? Maybe one of our O&G Lawyers here on GHS could build a iron clad clause and share it here on GHS that would cover this matter. I feel sure that some operators would ignore that clause or find a way around it just like they have in the past with other clauses in the lease. 

Permalink Reply by P.G. on December 11, 2013 at 15:59

Isn't that basically what people are complaining about what CHK is doing...
Selling NG cheap to subsidiary company and paying royalties on that?
Then that subsidiary company could sell it for any price they could get?

Permalink Reply by Two Dogs, Pirate on December 11, 2013 at 16:22

Yep.

Permalink Reply by Charles Bell on December 17, 2013 at 14:24

Nat gas $5.50 by Jan. 2015

Permalink Reply by Steve P on December 18, 2013 at 10:26

I have heard some industry rumblings that there may be some rigs moving back into NW La in the first half of 2014.  There are a few HS units in NW La that have not been drilled, but not that many.  So, if there are rigs coming in, then they would presumably be drilling alternate wells in already producing units.

I realize that this is completely contrary to nearly all of the postings on the blog, and maybe the rumblings I have heard are inaccurate. 

 

Permalink Reply by Skip Peel - Mineral Consultant on December 18, 2013 at 10:58

Chesapeake has picked up their pace of drilling.  Some of their wells are unit wells and some are alternate unit wells.  BHP and ECA are still drilling the Haynesville. It is helpful to remind ourselves that the majority of wells drilling and permitted are not the old Haynesville horizontal design.  They are Cross Unit Lateral (CUL) wells.  To get an approximate apples for apples comparison each CUL well is the equivalent of 1.6 non-CUL wells.

Permalink Reply by Krkyoldhag on December 20, 2013 at 7:25

Today is December 21 and right now on stock report Natural Gas is $4.43

That's nudging close to $5

Might hit it before January 15th at this rate.

I am leased by Samson and read a blurb about some kind of problem that Itochu has had with KKR but can't find anything specific. 

Could it be that Itochu (owns 25% of Samson) didn't understand that KKR is a flipper?

Permalink Reply by Joe Aldridge on December 20, 2013 at 7:46

I think that would make a lot of royalty owners happy going into the New Year.

Merry Christmas and a Happy New Year!!!!!!!

Permalink Reply by olddog573 on December 20, 2013 at 8:05

Krykyoldhag, I am leased to Samson as well, who is Itochu?  Also, Ive talked to the Samson guys and they have said they have no intentions of drilling in 2014.  I am also leased to CHK and they do plan to drill.  Have around 6 rigs in the area with more coming for 2014.

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