We’ve previously brought you various articles, and comments on articles, describing how Marcellus/Utica drillers may benefit from the current crash in global oil prices. How? A number of oil drillers in Texas, Oklahoma, North Dakota and other oil states are not only not drilling new wells right now, but they’re also not completing previously drilled wells and in some cases, they are shutting in existing/flowing wells. All of which means there will be a rapid decline in the amount of “associated gas” being produced in those states. Less associated gas means less supply and less supply means higher prices–for M-U drillers. We spotted an article that does a good job at defining how this will likely play out. How much less associated gas can we expect? What does that mean for natgas prices (when will they go higher)? What if the price of oil is $40/barrel rather than $30/barrel?
We’ve previously brought you various articles, and comments on articles, describing how Marcellus/Utica drillers may benefit from the current crash in global oil prices. How? A number of oil drillers in Texas, Oklahoma, North Dakota and other oil states are not only not drilling new wells right now, but they’re also not completing previously drilled wells and in some cases, they are shutting in existing/flowing wells. All of which means there will be a rapid decline in the amount of “associated gas” being produced in those states. Less associated gas means less supply and less supply means higher prices–for M-U drillers. We spotted an article that does a good job at defining how this will likely play out. How much less associated gas can we expect? What does that mean for natgas prices (when will they go higher)? What if the price of oil is $40/barrel rather than $30/barrel?