when does nat gas become to cheap?
How much longer will companies even bother leasing land? With so much natural gas on the market and the price in the basement why would they even bother? Yes the potential is their for a big profit for them but when? What do you think? No we are not leased and don't expect to be anytime soon.
http://www.businessweek.com/articles/2012-04-17/is-natural-gas-too-...
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Replies to This Discussion
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Permalink Reply by Lance Nimmo on
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In a simple answer. If they have not yet leased in your area, and you are predicted to yield dry gas, they are not interested. If you're in Utica territory that is far enough west to be either wet and or oil, they're a comin...
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Permalink Reply by Jim Shoos on
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If you're in a dry gas area... you got two chances, slim and none... and slim just left town.
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Permalink Reply by Kathleen on
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IMO I bet in time people will come around to lease but they will want to lease cheap in the dry gas areas hoping to flip it one day when the prices go up. There are many speculators out there that would gamble the price will go up within a certain time frame. I do not believe though any oil or gas co. will be around to lease just speculators for a long time. I wouldn't be surprised if NG areas start seeing offers to out right buy the rights and they just sit and hold waiting for the market to tell them when to resell or lease.
I personally would jump on someone making an adult decision to sell their rights right now in some areas since the price would be lower and it would off set my oil and gas money taxes. It's a full write off for federal taxes.
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Permalink Reply by owner on
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Kathleen, how can you write off the purchase of gas rights on your federal taxes?
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...bottom line, you can't "write it off" as she claims, unless you establish a business dedicated to the proposition of buying and selling minerals... and that is still not going to be an offset against royalties that you might receive on a piece of property that you own individually.
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Permalink Reply by Kathleen on
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With like kind exchanges. That works with the sale and purchase. Federal code 1031
I'll look further to see since I think you can take the money made and reinvest it back into the same thing you made the money from (referring now to leasing).
This is similar to years ago before capital gains were lowered and this effected a lot of people. if you put your profit you made selling your house back into the new house in repairs or upgrades within a certain time frame you did not owe the taxes on that money, profit made. If you missed reinvesting that money back into the new home by one day we would have had to pay 28 cents on every dollar made but at that time it was 18 months.
We sold minerals in Arkansas and if I bought minerals dollar for dollar the taxes are differed, but I think the timeframe now is shorter on a like kind exchange.
Again I'm not 100% sure on the lease money works this way but sales do.
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Permalink Reply by SBRW on
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Simple - Never as the ones leasing up the ground are the oil companies and eventually (when they are ready) they will manipulate and speculate the prices of natural gas through the roof just as oil. They are securing their future for years to come.
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Permalink Reply by SBRW on
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Sit back and watch the change take place. Last I checked I was happy and understand the real cooperate world at hand. Keep being a sheep and follow away.
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Permalink Reply by melissa humphrey on
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Shortsighted. When did gas go under 2 and stay there?
Its natural in my booko, now IS the time to lease and buy NG dry gas assets.
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