Ongoing Low NatGas Prices Affecting Production, M&A, Everything

According to a recent Reuters article, "A 46% drop in natural gas prices this year is rippling across the U.S. shale patch, threatening to slow drilling and chill deal-making in a move unthinkable six months ago as global demand soared." Although the Henry Hub price for natgas rose over the past few days with the changeover to the NYMEX April contract, the price is still well below $3/Mcf. At that price, natgas drillers (in the Marcellus/Utica and elsewhere) are dialing back their drilling programs--essentially maintaining the status quo with production volumes. And at current low prices, mergers and acquisitions activity has pretty much dried up.

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