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 Spike's Kin on February 18, 2023 at 4:44am
How do I unsubscribe to this Gomarcellushale.com site spamming my inbox? Thanks
Permalink Reply by Dott on February 18, 2023 at 6:19am

Spike,

Sign in and then at the top underneath the 1st reply box on the left is a small "mail icon" that will say "Stop Following-Don't email me when people reply". Click on that to stop following. BUT YOU HAVE TO SIGN IN FOR THAT OPTION.

Permalink Reply by Ralph cramdon on February 26, 2023 at 2:09am

Range jumped on rumors that PXD was a buyer .. PXD has since denied the rumor 

Permalink Reply by farmgas on February 26, 2023 at 4:45am

Wouldn`t this be a major industry deal if true?

Permalink Reply by Ralph cramdon on February 26, 2023 at 11:44am

PXD is much larger than RRC . RRC / AR does produce a gas with a high btu content or wet gas ... It could be a roller coaster ride for holders of rrc .. Gas might be investable now .. Its all up to the weather and overseas politics 

Permalink Reply by Ralph cramdon on February 27, 2023 at 1:26am

One other point .. Producers , much like Gold Miners are continually depleting their Assets , hence the need for new fields is an ongoing process .. The sector will continue to consolidate . Diversified has found a niche and has made many deals the last few years .  

Permalink Reply by farmgas on February 27, 2023 at 4:03am

That is an interesting comparison Ralph.  With gas producers to be successful for the long term would then need to be far ranging and not confined to a regional gas field I suppose.  In Appalachia gas producers cite stacked pay as extending their life.  Potential for longer laterals decreases without large tracts of contiguous acres to drill.  Consolidation seems to be the future for gas companies in my view. 

When Diversified purchased old shallow wells from EQT & other gas companies at what seemed like a huge cost, I wondered how they could justify the cost for declining well producers.  It seems to be working out for them.  Keeping well maintenance expense low and gas flowing is working.  Something else that has impressed me about them is their acquiring well plugging companies.  I see this as sound environmental & social practice for the industry and society in general.  They have a lot of old wells that will need plugged someday. I see PADEP issuing new permits almost daily to them to plug wells.   I think they are doing their part to uplift the legacy of the gas industry. 

Permalink Reply by Ralph cramdon on February 27, 2023 at 4:33am

I have sat with the Boss of Carbon Natural [ which was bought out by Diversified } during several meetings .. He mentioned his dislike of Diversified's game plan . He mentioned more than once the huge cost of plugging those older wells . After speaking of those negatives of Divesified , he went and sold Carbon natural to them .. Funny how life works out 

Permalink Reply by farmgas on February 27, 2023 at 4:50am

That was my initial thought & concern about Diversified.  They seem to the untrained eye that it is working for them, and shallow gas well landowners. So far? My initial thought was that the big gas companies were unloading their huge maintenance budget for these wells to Diversified, and yes in the end the landowners would be screwed!  I guess time will tell how the story ends.  A huge benefit for the major gas companies was retention of the deep gas rights.  I`m not familiar with the economics involved but a new concern to me is Diversified buying declining Marcellus wells.  Will decisions be made to favor higher producing Marcellus wells over a wide range of low producing Conventional wells, and then plugging them.

Permalink Reply by Ralph cramdon on February 27, 2023 at 9:49am

Farmgas has a lot of insight in the gas sector . Diversified has zippo appeal to the Market . Investors look for players who make headlines and have a high Beta .      I don't know if PA requires a bond for each production well . If Diversified ever went belly up , landowners might become liable for plugging . 

Permalink Reply by farmgas on February 27, 2023 at 10:20am

Thanks, this Go Marcellus Shale blog offered a lot of information about the growing gas industry in PA many years ago. I long for more member comments like it was 5-10+ years ago.  I think there are still many landowners who would benefit from these discussions. 

I don`t know the answer to your question Ralph.  We have new lease documents from CNX & Diversified when the ownership buy-out occurred.  I trust Diversified assumed all responsibility for ownership & compliance to all PA laws.  Like all gas companies, if production ceases then ownership goes back to the lease holder.  Since the deep gas rights are owned by CNX I`m not certain what this means for the shallow gas rights.  Maybe someone out there in GMS land might know the answer.

Another point is if gas production stops then free gas to the landowner also stops. 

Permalink Reply by Ralph cramdon on February 28, 2023 at 1:05am

I too enjoyed and found info provided by posters like you and Paleface useful ..  Jack Young is another name that comes to mind .. Those early days were exiciting times for Folks in the region , the region has matured , hence the lower level of activity here .      Any info that helps Investors like myself make informed decisions is helpful . After being in Tioga region , I also root for those Folks to do well , some of those regions have been struggling for years ..... I am spending a few months in SW FLA in a region that has a history of oil production . Marine Fossils abound in areas that have produced oil in the past .. I have one  of those fossilized rocks sitting in the kitchen as i type ,, I guess I am somewhat of an Energy Geek .. RRC reported last night . time to give them a deep look . 

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