Different Drillers Gas Pricing

I am currently in 2 drilling units in Susquehanna County.  One of the drilling units is run by Cabot and the other is run by two companies ,Carrizo which has a 40% stake and Reliance which has the remaining 60%. In the month of October 2013 the Cabot well gas price was $3.11.  In the same month in the other unit, which is shared by two companies, the Carrizo well gas price was $2.31 and the Reliance well gas price was $2.79 on the same well. Is this a common occurance to have such varing prices between companies?

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Permalink Reply by Gas Boy on January 18, 2014 at 9:14am

Different companies could have different prices due to their gas contracts (selling the gas) stating that the company will be paid X for different volumes (graduated scale): more gas provided = higher price, less gas provided = lower price.

Permalink Reply by Jim Litwinowicz on January 18, 2014 at 10:04am

Its also a function of hedging.  Companies hedge their prices just to be sfae and some do a better job than others.  Some hedge a little, some hedge a lot.

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