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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Permalink Reply by farmgas on July 23, 2023 at 6:09am

When a gas company buys another gas companies assets as Paleface mentioned, how do things change in the relationship with the landowners or royalty  owners?  Is the new gas company obligated to fulfill the terms of the old lease?

Permalink Reply by Nancy Mosley on July 23, 2023 at 6:22am

Yes. But sometimes this does not happen. Then what?

Permalink Reply by farmgas on July 23, 2023 at 7:40am

Good question.  Any landowners or royalty owners with firsthand experience in this situation?

Permalink Reply by Nancy Mosley on July 23, 2023 at 7:51am

Yes, in WV. For old wells: for many decades for these old wells, no deductions were taken out. Last year a new company bought the wells and soon started deducting WV oil and gas severance taxes, then this year deducted Ad Valorem taxes. As I understand that latter tax, this is what the producers pay on their working interest portion of the revenue. The oil and gas owner pays his/her own Ad Valorem tax as part of the property tax charged by the county. The calculation for producing oil and gas property includes this information, and the tax is different for producing vs nonproducing property.

The amounts are not large enough to get a lawyer involved but I have heard of other situations where the amounts were significant, for the newer wells. If you have an iron clad lease, you have a decent chance of fighting this sort of thing, but the companies will do their best to ignore the lease terms, or be creative in interpreting these.

I hope to hear from others about this.

Permalink Reply by Educate Me on July 23, 2023 at 7:55am
EQT bought out Rice and everything remained the same. Rice leases were honored as far as I am aware.
Permalink Reply by Ralph cramdon on July 26, 2023 at 1:11am

RRC decent report thanks to hedges .. EQT uninspired report . BOA still likes gas stocks over oil ... Propane prices finally stabilized .. Propane inventories too high   

Permalink Reply by farmgas on July 26, 2023 at 2:20am

Did you notice the interest in NW Pennsylvania by RRC for Utica & gas liquids?  Something to watch in years ahead.  CNX report tomorrow. 

Permalink Reply by Ralph cramdon on July 26, 2023 at 3:14am

Yes Farmgas  did notice RRC mention of NW PA .. This area has a long history of production , since then a few attempts to unlock its secrets have been met with failure ..[ Floyd Wilson , Petrohawk   ? } if memory serves me, tried several years ago and failed .. Wilson had an ego as big as Texas , I was not a fan 

Permalink Reply by Ralph cramdon on July 26, 2023 at 3:16am

Floyd Wilson = Halcon 

Permalink Reply by farmgas on July 27, 2023 at 12:40am

2Q CNX reporting out today.  Any thoughts?  How does wall street view it? 

Permalink Reply by Ralph cramdon on July 27, 2023 at 2:19am

CNX continues to uninspire , decent outfit , zippo dividends , 11 % CAGR on share buybacks .. Most energy Investors will continue to look elsewhere for greater potential upside .. CNX is more bond like than most producers and the clock continues to click on remaining well sites .. Best of luck , as this is one mans opinion .

Permalink Reply by farmgas on July 31, 2023 at 2:09am

What motivates investors to choose a gas company who do not pay stock dividends?  Do they just hope the stock price increases when they want to sell it?  Sounds like a risky strategy to me.  Is this limitation of future drill sites motivating their pace of drilling now?

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