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Permalink Reply by Tim Tarr on July 7, 2015 at 5:19am

"That would kill the industry"
I suspect that is The Wolf's true goal.
These low prices will kill drilling. So eventually prices will rise because of lower supply. Sooner rather than later their will be producers go under. Their debt will do them in. The wells already in production will still produce but who will finance new wells that have a negative ROI. Most of the producers financing costs are >6%. About the only option is asset sales. Who will buy and at what price? I suspect some of The Big Boys will pick up some producers cheep . Just drill to HBP and wait for better pricing. Those HBP wells will be carried at a tax loss.

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Permalink Reply by Jim Litwinowicz on July 7, 2015 at 1:09pm

They are killing coal and want to kill nat gas.  Losing jobs, tax revenue, and driving up energy costs for everyone, including the working man/woman.

I wouldn't count on the 'big boys' to buy in. Shell sold out recently, BP did a year ago. Exxon drills very little. Seems the majors are not nimble enough and innovative enough to compete with smaller, more agile firms. 

Gonna be a long, slow slog.

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Permalink Reply by Tim Tarr on July 7, 2015 at 8:04pm

Yes they would love to kill Nat. Gas along with Coal, but they can't figure out how. Without a Severance Tax, that is. Contact all your repensitves to let them know you will vote against any who vote for a Severance Tax. Better yet you will donate to their Challenger in the primary. Any RINO who votes or supports a Severance Tax should be defeated!!!!

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Permalink Reply by Frank Walker on July 8, 2015 at 9:55am

Such RINOs should indeed be defeated, exactly as you say.  But since many of them are from SEPA, they're not gonna be defeated.  And between the RINOs and the Democrats, PA shale owner's gooses are cooked.  Wolf's getting in harmed us badly.  And the guy has only just begun to wail on us.

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Permalink Reply by Undecided About Oil on July 8, 2015 at 11:25am

Jim,

 What if they can pass this tax all the way down to the end consumer?  That would hurt the end consumers of the Nat Gas and not hurt the industry as much.

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Permalink Reply by Jim Litwinowicz on July 8, 2015 at 4:07pm

Well, all taxes on businesses eventually get passed onto the consumer  Thats a big secret that government types don't want you to know.

But with this tax, it will add to the costs of doing business in Pa, already among the highest. If you are a driller in Pa, it will mean that gas from other states will cheaper. And since there are over 40 shale plays in approximately 30 states, it may be more competitive to drill elsewhere. If you are a company that drills exclusively in Pa, you will have to hang on for a couple of years and pray that new pipelines and LNG export terminals come online soon and drive prices up before you go out of business.

Even other states that have a severance tax don't have such high corporate taxes along with ones like rolling stock and capital taxes, workman's comp rates, sales tax. personal income tax, hotel taxes, and unemployment taxes.  We also have more regs complicated by the fact we have over 2,500 municipalities to deal with.

With gas at or below $1 in much of the state, adding more cost is not advised.

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