Very interesting article about the downward spiral of drilling and exploration, From the New York Times.
A decade ago, natural gas was heralded as the fuel of the future. In shale fields across the country, hydraulic fracturing uncorked a lucrative new source of supply. Energy giants like Exxon Mobil and Chevron snapped up smaller companies to get in on the action, and investors poured billions of dollars into export terminals to ship gas to China and Europe.
The boom has given way to a bust. A glut of cheap natural gas is wreaking havoc on the energy industry, and companies are shutting down drilling rigs, filing for bankruptcy protection and slashing the value of shale fields they had acquired in recent years.
Chevron, the country’s second-largest oil and gas giant after Exxon, said on Tuesday that it would write down $10 billion to $11 billion in assets, mostly shale gas holdings in Appalachia and a planned liquefied natural gas export facility in Canada. The move was an energy company’s clearest acknowledgment yet that the industry has been far too optimistic about the prospects for natural gas.
While cheap natural gas continues to take market share from coalin the electricity sector, supply of the fuel has far outstripped demand. As a result, once-booming gas fields in Arkansas, Louisiana and Texas have become quiet backwaters. The number of gas rigs deployed nationwide has dropped to 132, from 184 last year.
I think EQT will emerge from this downturn in good shape. How about CNX Gas? Do they have the financial strength to survive too?
Coal Plants were shut down in 2011 in the North East due to the EPA requirements for 2016. Natural Gas fired plants have been built and are planned to take the place of the Coal Fired Plants which has and will increase demands on Gas. This means Our Nations electricity is running on Nuclear, Gas and what is left of Coal Plants. Solar and Wind won't get er done.
These boys are dropping their holdings and heading for he hills for reasons other than profitability. It's called Corruption and they have seen the writing in the Executive Orders and know they are finished.
Dark to Light - 6 days 0 hours and counting.
We have the best Politicians money can buy.....
And to Bill Simpson,...…………………..The rest of us are providing the DOLLAR BILLS, SWEAT and GRUNT WORK and getting little in return!
On top of that, to cloud the entire situation, it seems as if every little word or motion is almost guaranteed to spark someone to explode into some sort of personal vendetta against someone else. Does not seem to matter how innocent it might be, someone takes offense!
......It's the New York Times.
Some more analysis from Barron's - https://www.barrons.com/articles/u-s-shale-drillers-are-booming-a-tidal-wave-of-debt-could-threaten-the-sector-51576262556.
Brent - How do you see decade #2 of the shale boom? How will E&P`s survive and who are the likely ones?
The lowest cost producers will survive ...............
Production growth will come to a halt in the next few years ........
Ralph - I think as OT recently said, the E&P`s will only be doing maintenance budgeting for new production. In other words, only drill as needed to sustain their budgets. Does this mean no more over producing waiting for the market, pipelines, etc to catch-up to them? Is this how other gas plays have been managed too?