Replies to This Discussion

Permalink Reply by Frank Walker on March 31, 2012 at 1:54am

Thanks, Hump

For sure you're right that it's falling off fast, month by month, as contracts are re-negotiated.

What is even worse is that, in the unlikely event NG prices recover [no chance for that happening in the next couple of years] we will not see the help soon thereafter.  As on the way down, it will take time on the way up for royalty owners to see the benefit of a recovery . . . . not that recovery is gonna happen in the foreseeable future.

Here's the deal, Hump:

Dry gas is dead.  The sidewalks have been rolled up and everybody is heading home.  Whatever dry NG they need is gonna be coming from the wet gas wells, after processing.  Dry gas wells will only be supplying residual needs which are extremely scant with all this warm weather.  So dry gas counties in NEPA are all but finished.

Oh, sure, there will be a small amount of left over HBP drilling and production, cleanup stuff, you know.  But the halcyon days are all in the rear view mirror, absent a spike in demand.

And Hump, let me tell you, I'm not seeing anything remotely resembling a demand spike.  They even kicked the Pickens Plan in the butt.  Fools.

Smartest thing I ever did was lease my land when I did.  Because I sure as heck would not be able to lease it today!!!   

Permalink Reply by melissa humphrey on March 31, 2012 at 3:22am

Sorry to be so adamant but not even close. We use 64 billion cubic a day in the US. NY NJ PA New England, 16 BCF / d.   Wet gas increases dry output,  incrementally adding to supply. Adding 2-3 Bcf is significant to the balance sheet it ISN"T 64 Bcf.  Ie Seneca is going to ? 3 rigs from 6 I think, their DCNR leases expire in 2010 lots of time.

APC/CHK pull back but need to drill to HPB min.

Contracts? Modest amounts of n-gas is sold on long term contracts. Gas trades basis NYMEX daily, premium or discount.

 

Lets see gas was 10$ 4 yrs ago, is it KING, always going to be 10$ kill use? NO high prices incent high production and walla, really did!!.

N-gas is a commod, subject to common supply-demand laws.

No kidding gas isn’t going to 3 or 4 in weeks. To come out of this whole may take 6 mo 18 or 24.

The BESR Marcellus, SE Bradford, N Sullivan  and SEW Susquehanna are among the lowest cost prod- a huge advantage, they will be producing 5$ gas when there are shut in, in 2016.\

 

I seethis as good back drop Look at a long term NYMEX price chart back to the 1 st trade.

Melklissa Humphrey  thankyou  

Permalink Reply by Frank Walker on March 31, 2012 at 12:48pm

Hump good post

Sure hope you are right about pulling out of bear market within 24 months.  Won't help me much personally, though.  And I'm less optimistic than yourself about future.  When I read about giving gas away it's tough to envision four or five dollar gas in two years.  Heck, right now I'd be delighted just with three dollar gas.  My guess is we see $1.75 first.  Things were already bad without it.  Then we got this stinkin' multi-month warm spell.  Horrible.

Permalink Reply by melissa humphrey on April 1, 2012 at 6:37am

If summer is cool we could see 1$.

Let me find a link for you.

YES,it is miserable, but prices really can;t stay too low or too high for two long.

Imagine being a bank to a gasco with 5$ breakeven vs Cabot at 2.50, scaredto deatrh and they will cut off credit, rig counts falls, declinee curves catch up and we need NE PA dry gas.

I think.

If much of last decade we were 4-12, 90s ws 1-3, we won't be 5-10, maybe 4-6 90% of the time- here is hoping.

Permalink Reply by Frank Walker on April 1, 2012 at 8:37am

Yeah.  There is so much gloom right now.  I admit I might not be thinking about this in a dynamic fashion.

But you know, Hump, it seems to me a lot like the price of housing right now.  You know, there is ginormous "shadow inventory".  I think you know what that is.  Anyway, so any time prices try to recover a portion of the "shadow inventory" gets sloshed onto the market and holds prices down.

With NG the "shadow inventory" is all the ongoing HBP drilling on pads which quickly could support more wells.  So the pads are up and just awaiting higher prices to allow many more wells being drilled  . . QUICKLY!

Just under my own property, er, I mean within my own set of drilling units, I am looking right now at twelve undrilled wells . . . . because of low price.  That's huge latency.  And that's just me alone.  I'm not even a player.  This same sort of thing is going on everywhere.  I've not been hit personally with shut ins yet.  I expect that to be next.  Or choking if it can be done without damaging the wells.  NG is a drag on the market.  Nobody wants it.  And the idiots in Congress just voted down the Pickens Plan.  Nuts!

Permalink Reply by Doug Duffield on April 6, 2012 at 1:48am

Wells in Brad Co drilled by CHK are already choked, most choked back to a couple million a day and turned up and down. There are miles upon miles of pipeline being preped and laid down and rigs are still drilling, don't see alot of gloom and doom,imo. The CENY and CHK compressor stations in Wyal Twp are about done and are ready to go, things are getting ready for when demand is on the same page.

Permalink Reply by melissa humphrey on April 6, 2012 at 6:57am

for sure substantial inventory exists, the gen impression is whole units would not be completely developed now or in 2 yrs or 8 anyway. This even with 4$ gas is a 30-40 yr play.

Any gas co will HBP along the way even with 5$ gas, to manage their leasehold.

 

My guess, N Sullivan and NE Brad have 1 BCF/d ready to tie-in.  US rig count is down 3oo gas directed I think?

1 BCF will steal mkt share we use 63 Bcf/d.

 

 

Permalink Reply by Doug Duffield on April 6, 2012 at 3:04pm

NE Bradford?

Permalink Reply by Frank Walker on April 9, 2012 at 9:23am

"Melissa" has a penchant for confusing NE and NW where Bradford County is concerned.  This is something you will learn about "Melissa" the more of  her his their posts you read. 

Permalink Reply by Ken Gibbs on April 8, 2012 at 2:01pm

I am with you Melissa. The doom and gloomers that are constantly posting < not naming names> really have no clue and do not have accurate information yet they < he > is constantly trying to make things seem the worse.

Permalink Reply by Frank Walker on April 9, 2012 at 9:15am

Kenny right on!

I agree with you about the importance of not naming names, and about the importance of maintaining a false front;  better sweet lies than the bitter truth.

Your message is a critical one.  Now if you could just convince the AP how good things are with NG and prevail upon them to shut up:

Link to reality

And please contact the other major and important sources of NG news and tell them to put a sock in it!!  Please!!!

LOLROFLMFAO

Permalink Reply by melissa humphrey on April 9, 2012 at 1:56pm

NE Bradford probably has .5-1 BCF ready to come on stream.

 

There is no guarantee, the price drought could last longer. Anyone truly interested in the process should look at history. one could sets some odds 20% bottoms in this time frame, 20 that and so on.

 

For those unfamiliar with corp. finance, may not know banks don’t lend when a industry cycle turns unprofitable. Equity/bond mkts won’t finance, whilst they threw money at them in 08.  An Exxon or Chevron cares zero about 1-2 yrs, they are setting up to enjoy the 30-50 yr n-gas boom  ahead.

 

Inordinately focused on today Tight-types, i.e. spring 2008, ngas7-13$,  “gas will  be 20 – 30 soon, it’s a new  paradigm ,  30 bcf / well ~~~” etc may not have any knowledge of historic commodity pricing. Crude oil peaked the day Drake found oil Sept 1958, it was 20$, inflation adj, 400$, within 3 yrs it was .05/barrel.

 

Now low prices make people feel extra bearish, “it will never recover”, the mirage came and went, bad lucked out again. Name a commodity where use was record and sold for under the cost of production for 3 yrs -come back to me on that one.

 

Worst risk is you land is held by production with 1-2 wells / unit and by yr 5 prod will be down 80% and unless gas is back up, you won’t see more drilling til?

 

Mr. Duffield- 100% agree there is little slow down in SE Bradford. CHK needs to drill hold by prod and at 3$ even with a 15% royalty burden, wells there are very profitable, especially vs. many other Marcellus areas.

 

Yes NE  Bradford, NE has been drilled extensively, I think a few wells were tied in recently, March,  and the area needs extensive gathering to be completed. We have no production data yet, is it as rich as SE Brad or medium good like W C Bradford? Either way but yes there could be .5-1 BCF ready to come on stream relatively soon from NE Bradford.

///////////////////////////////

 

Here we, go my uncle warned me, (now studying the Miss Lime, mid continent) forums want to stay low level, bring real info which participants can track down and soon, you are gone, unwanted. Or what is your problem  Frank Walker ?

 

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