Is production cut back in the summer months?
Are wells choked back and production slowed during the summer months? In hopes that prices go up in the winter months and then they let the gas flow freely then? Sort of like saving it for a rainy day.
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Permalink Reply by Dexter Green on -
It depends on what the storage fields look like. Right now the storage fields in the East are down 24% from last year, mostly due to the very cold winter. If a company has a forward contract for X months and the price is relatively close to what they estimate it will be in the fall/winter then they'd run the wells as usual. I'd guess (and that's all it is at this point) that any choke management is being done as a matter of preserving the well pressure rather than trying to save it up for the winter contracts. August 2014 contracts are trading a little higher than September and October contracts right now. August is trading exactly at HH spot price right now, so it would make sense to sell into the summer the maximum that the well can produce and have less production once the early fall hits. Again, just a guess.
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