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Permalink Reply by 0i7okn54zwbdo on April 6, 2014 at 3:55pm

The answer is complicated.  Gas contracts are sometimes (especially in these shale deals where JVs are the norm) negotiated by each individual partner.  Each partner has their own commodities trading desk and they engage in a wide range of futures contracts, options, swaps, et al and the price is often times wildly varied.  Some companies will negotiate better prices by going longer on their contracts, thus locking in something closer to a strip price rather than having short term agreements which can be either a huge windfall or a total disaster.  

For example, if you had entered into a sales contract in mid 2008--when the price was quite high--you might have considered a longer contract (five years maybe) to be a good deal at a price that was perhaps 25% less than the spot price at the time because you thought the market might dip over the coming years.  If you did that then you'd have been selling your gas for a much higher rate through those very ugly years when the price shifted from $12+ to $2.  Conversely, you may have been like CHK, who was entirely out of hedge for all of 2012, and been subject to the market price.  It's entirely plausible that a well drilled and put into production by CHK in 2012 was selling gas for as little as $2/mcf while a JV partner (Statoil, et al) took a longer view of the market and locked in for four years at say $4.50/mcf.  That is the basic premise of why your gas--the same gas, no matter how you slice it--had such different prices.

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Permalink Reply by cj wyalusing on April 7, 2014 at 2:12am

THANKS MARCUS    CJ

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Permalink Reply by bo boboski on April 6, 2014 at 10:03pm

chesacrook?

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