KJH Wrote: ------------------------------------------------------- > Regardless of production costs and rig counts and > all that other stuff, the simple matter remains > that when there is too much gas, there can be no > rally. Prices must go down or remain flat. How > can they go up? This is the best place to monitor > gas storage: > http://americanoilman.homestead.com/GasStorage.htm > l Thanks for the informative link, KJH.
CFABLACKBELT Wrote: ------------------------------------------------------- > Here is my take and what I am hearing from some of > my industry contacts. > > Industrial demand is poor right not and > improvement in the near term is unlikely. The > supply from shale overwhelms the decline in rig > count. Bulls say the opposite really. > Essentially saying that the decreased drilling > will start to take a dent in supplies. The > contango in the prices seems to be hinging on the > “green-shoots” in the broader economy. > > The Obama Admin, isn’t particularly friendly to > the oil & gas industry so this could hurt the > sector. I think the nature of the individual well profiles of the shale gas wells are the dictating factor on why supply would be reduced with less drilling activity. The well profiles are something like superharmonic with 70% decline in rate within the first year, transitioning to exponential low decline at a low gas rate thereafter. The reason is for this is geological. This implies is that sustained drilling activity is required to materially extract reserves, which is contrary to conventional natural gas drilling of the past. I think the Obama administration has publicly stated a few times that they are advocates of natural gas as an energy source due to natural gas’ clean-burning properties.
Sometimes gas has to be produced as a byproduct of oil. If there is no place to store that gas (which there won’t be if we have a few more gas injections like we’ve been having) then that gas will get flared. It’s hard to pay $3/mcf for gas when it’s being torched in your own backyard
^ We’re not allowed to get away with doing that in Alberta if the solution gas produced is over 0.5 E3m3/d or roughly 20 mcf/d. I wonder what the regulations are in the various states?
Man this is funny Today is September 8 and UNG is $9, NG is less than $2.5 I wonder what happened to people who bought UNG at $15 LOL
Um, they lost $6/share?