Surging Natural Gas Prices
How are the surging natural gas prices affecting drilling this year, and what about going into 2022? Are the gas companies taking advantage of these higher prices? What`s next?
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Replies to This Discussion
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Permalink Reply by Ralph cramdon on
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Now 90% T Bills
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Buying Mid Nov 2023 with a 5.4 % yield , today .. Good to see your post , Paleface .
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Permalink Reply by Nancy Mosley on
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A lot more permits and requests for permits have been issued in the last several months in West Virginia. As stated, it takes time before even planning a well until it is drilled and producing, but it looks like in the next months/years there will be even more gas coming from this region, at least.
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Permalink Reply by farmgas on
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Which gas companies will feed gas to the MVP? Will gas from Western PA be affected?
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MVP will provide access for EQT for sure .. RRC , SWN possibly as well , Seems like AR is nearly fully comitted , but do not have time to verify ... Regardless , all will move in relation to HH gas price ... Gassers getting a small play lately ,, still on the sidelines , production softer the last two days
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Permalink Reply by farmgas on
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Unless I`m being overly enthusiastic for the MVP benefits to the gas industry, wouldn`t its opening create a huge demand for more NG? Those gas companies you mentioned would need to ramp up drilling & production to meet the added supply need. With a higher volume of NG going to the MVP by these gas companies wouldn`t that create a demand for other gas companies to fill that void? The primary industry statement against ramping up production is a need for more pipelines, well here`s one!
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Permalink Reply by Kyle Nuttall on -
Looking at the EIA report for natural gas production, it looks like WV produces a little over 8 Bcf/day. SW PA probably produces about that same amount, maybe a little less. I can't find numbers for just SW PA, so I'm guessing. The MVP will be able to take up to 2 Bcf/day. That's a significant bump, but it probably won't be too long before Antero, EQT, SWN, Range, and the smaller producers will be able to fill it up. I'd guess there will be a drilling boom for about a year, and then things will be back to normal, with just a couple more rigs operating in the area. Feel free to critique my numbers and assumptions.
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No reply button on Kyle's post , so I will reply here ... MVP if there is a bump, will be short lived as the cycle will occur once again ... Long term gas is investable , as tier 1 locations dry up , tier 2 will be worked hard to keep production at current levels .. Permian too will see a decline as it matures ... As I have said before , if I was 'King' , I would not allow LNG sales to occur , I would be saving that gas for future generations ...
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Permalink Reply by farmgas on
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Kyle, your numbers match-up to the the MVP website. Any bump will be beneficial, I believe.
Ralph or anyone else, how does the gas industry differentiate Tier 1 vs. Tier 2 acreage? I realize core areas will be Tier 1 but is there generally a production rate or a decline rate difference for each Tier?
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I would suspect everyone has their own definition and every play has its own metrics ... My take of tier one, is a region or wells where the payback is less than 16 months , better plays pay back in less than a year ... Ultimate EUR's , size of play , plumbing/piping costs /shipping costs also matter .
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Both RRC and CHK say MVP bump will be nominal
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