Commodity Price

Commodity Price | Coterra Energy (Cabot O&G) | Energy Companies | Industrywide Issues | Pennsylvania | Susquehanna County

Cabot O&G: Marcellus Cost Structure Goes Through the…Floor!
November 25, 2013November 25, 2013

Cabot Oil & Gas continues to impress and astonish the drilling industry. MDN has written many times before about Cabot’s ability to spin “gold” (profits) from “hay” (low cost price environment). Cabot recently presented at a pair of “global energy conferences” arranged by investment firms Jeffries & Co. and Bank of America Merrill Lynch. We have the slide deck from each (which is pretty much identical) and we’ve embedded it below. You’ll want to review it if you have an interest in the Marcellus Shale.

One of the startling pieces of information we glean from it: Starting in 2009 Cabot’s cost to drill and produce gas was $2.47 per thousand cubic feet (Mcf). By 2013, that number had dropped to an average $1.37/Mcf. Next year, in 2014, Cabot says their Marcellus per unit cash cost, the cost of drilling and producing, will be around…
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Commodity Price | Industrywide Issues

How Low Can You Go? Northeast NatGas Prices Dip Below Henry Hub
October 14, 2013October 14, 2013

In what increasingly appears to be a game of limbo, or “how low can you go,” natural gas prices in the northeastern part of the U.S. keep going down. In a reversal of past trends, many of the market points in the northeast are beginning to slip below the benchmark Henry Hub market point price in Louisiana.

What does it mean? It means residents in one of the most populous areas of the country, the northeastern U.S., are now paying less for natural gas than they did just a few years ago because the gas they are using now is produced nearby in the Marcellus and increasingly in the Utica Shale region. There is so much locally produced shale gas, it’s causing big changes in the natgas marketplace, as noted by the U.S. Energy Information Administration (EIA)…
Read More “How Low Can You Go? Northeast NatGas Prices Dip Below Henry Hub”
Commodity Price | Coterra Energy (Cabot O&G) | Energy Companies | Industrywide Issues | Pennsylvania | Susquehanna County

The Cabot O&G Marcellus Rocketship – To the Moon!
October 4, 2013October 4, 2013

Cabot Oil & Gas, one of our favorite Marcellus drillers, continues to amaze and astound just about everyone. Last Friday (a week ago) the company issued a new “guidance” or “this is our best, educated guess” as to how much natural gas production the company will end up producing for 2013, and how much they believe it will grow in 2014. Given Cabot is already the number one natural gas producer in PA and the first member of what MDN calls the “billion cubic feet per day” club (see Who’s a Member of the Marcellus “1 Bcf/d” Club?), it’s amazing that in 2014 they predict production will be up another 30-50% over this year. Wow!

Something just as startling and no doubt the envy of all their competitors, Cabot CEO Dan Dinges tips their hand as to what the breakeven price is at which the company starts to make money. It’s a LOT lower than even we thought is was…
Read More “The Cabot O&G Marcellus Rocketship – To the Moon!”
Commodity Price | Economic Impact | Industrywide Issues

Potential New Market for Marcellus/Utica Gas: LNG for Use in U.S.
September 19, 2013

Liquefied natural gas (LNG) isn’t just for exporting to other countries. LNG is increasingly used right here at home, in the U.S. GDF SUEZ Gas has provided LNG to the northeastern U.S. for the past 40 years for use in ships, railroad locomotives, long-haul trucks, and heating/power generation. Earlier this week GDF SUEZ announced a sort of “open season” for bids on a massive increase in their capacity to provide more LNG in the northeast. They call it the advanceLNG Project.

The potential good news for producers of Marcellus and Utica Shale gas is that if the advanceLNG Project moves forward, it will need lots of natural gas from the region to feed it. advanceLNG is a potentially lucrative new market for the northeast’s abundant supplies of natgas…
Read More “Potential New Market for Marcellus/Utica Gas: LNG for Use in U.S.”
Chesapeake Energy | Commodity Price | Coterra Energy (Cabot O&G) | Energy Companies | EQT Corp | Industrywide Issues | Range Resources Corp

Production from 4 Marcellus Drillers Keeps U.S. NatGas Prices Low
September 19, 2013September 19, 2013

An article on the investor website The Motley Fool does a good job of putting into context the enormous importance of the Marcellus Shale. According to the article, even though production from other major U.S. shale plays like the Haynesville has fallen in recent years, Marcellus production is up so dramatically it single-handedly keeps the price of natural gas low in this country.

The article (read it below) also gives a quick roundup of four key drillers driving the success of the Marcellus…
Read More “Production from 4 Marcellus Drillers Keeps U.S. NatGas Prices Low”
Commodity Price | Hydraulic Fracturing | Industrywide Issues

Former DOE Sec. Chu: Have Your (Fracking) Cake & Eat it Too!
September 18, 2013September 18, 2013

Steven Chu, former Secretary of Energy in the Obama administration (from 2009-2013) was the keynote speaker at America’s Natural Gas Alliance (ANGA) energy summit in Columbus, OH this week. Speaking yesterday to the assembled group of pro-drillers, Chu said fracking can be done safely. According to Chu, it’s possible to “have your cake and eat it too.” That is, fracking is safe and it provides inexpensive energy.

Chu also predicted the price of natural gas for the next 20 years (brave man)…
Read More “Former DOE Sec. Chu: Have Your (Fracking) Cake & Eat it Too!”
Commodity Price | Coterra Energy (Cabot O&G) | Energy Companies | Industrywide Issues | Pennsylvania | Research | Susquehanna County

At What Mmcf Price Do Shale Drillers Make Money?
August 8, 2013August 8, 2013

Ken Medlock, senior director of Rice University’s Baker Institute Center for Energy Studies and a team of Rice researchers recently performed a study of shale drilling economics. One of the questions they looked at: At what price per million cubic feet (or Mmcf) must a driller sell the gas in order to at least break even and not lose money? They have some interesting findings…
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Carrizo Oil & Gas | Commodity Price | Energy Companies | Industrywide Issues

Carrizo Oil & Gas 2Q13: Scaling Back in the Marcellus…for Now
August 7, 2013August 7, 2013

Carrizo Oil & Gas is a Houston-based driller that concentrates on U.S. shale plays. They have active drilling operations in the Eagle Ford and Barnett (TX), the Niobrara (CO), and in both the Marcellus and Utica Shale region in the northeast (PA & OH). In reviewing today’s Carrizo 2Q13 update, it’s obvious the company has decided to scale back in the Marcellus/Utica for now, in favor of putting their effort into the other plays. Carrizo’s average daily gas production in the Marcellus decreased from 38 million cubic feet per day (Mmcf/d) in 1Q13 to 33.9 Mmcf/d in 2Q13. Why? They’ve “shut-in” a number of their wells in Wyoming County, PA, waiting for the price of Marcellus gas to go up before they sell more.

Gas prices in the very-productive Marcellus are typically some of the lowest in the country. More supply than demand at this point. For example, yesterday the average sale price for natural gas along pipelines in the northeast Marcellus was $1.89 Mmcf according to NGI’s Shale Daily. The average sale price for gas yesterday in the Barnett Shale was $3.36 Mmcf! You can see why Carrizo is cooling their heals in the Marcellus. Here’s the portion of today’s Carrizo update dealing with their drilling program in the Marcellus/Utica:
Read More “Carrizo Oil & Gas 2Q13: Scaling Back in the Marcellus…for Now”
Commodity Price | Economic Impact | Industrywide Issues | NG Vehicles | Research

New IEA Report: NatGas in Transportation About to “Take Off”
June 20, 2013June 20, 2013

The International Energy Agency (IEA) today released their Medium-Term Gas Market Report (MTGMR), in which they say U.S. natural gas production will accelerate from 2014 through 2018 as higher prices spur drilling and infrastructure expansion brings more shale supplies to market. There are a number of interesting tidbits in the study (see a summary and slide show embedded below).

Among the predictions in the report is that natural gas is about to take off in a major way as a transportation fuel, making a serious dent in oil: “Thanks to abundant shale gas in the United States and amid more stringent environmental policies in China, gas is expected to do more to slow oil demand growth than electric vehicles and biofuels combined.”

The IEA press release announcing the latest MTGMR:
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Commodity Price | Economic Impact | Industrywide Issues

Marcellus Will Produce More Supply than Demand in NE – This Summer!
May 23, 2013May 23, 2013

A shocking observation from RBN Energy founder Rusty Braziel that he made last week at the Bentek Benposium event in Houston: Northeast demand for natural gas will be almost entirely met from local Marcellus production in the coming years. Starting this summer, the region will produce more supply than total demand! Implication? “Significant re-plumbing of the US natural gas pipeline distribution system will be needed.” That re-plumbing is already underway.

Rusty describes how production forecasts from just two years ago (2011) are wrong–way wrong, on the low side–because of the super-producing Marcellus Shale:
Read More “Marcellus Will Produce More Supply than Demand in NE – This Summer!”
Commodity Price | Exporting | Industrywide Issues | Research

Bipartisan Policy Center: U.S. NatGas Prices Will Stay Low
May 21, 2013May 21, 2013

It seems as if everyone is hauling out their crystal balls to try and divine where the price of natural gas will go in both the short and long term–and they all pretty much say the same thing: The price won’t go much higher for a long time–even if demand really picks up and even if the U.S. starts exporting natgas. The latest organization to take a stab at the prediction game is the Bipartisan Policy Center (BPC), a Washington, D.C. based organization founded by liberal Democrats and moderate Republicans (mainstream media’s definition of bipartisanship).

The BPC’s Energy Project staff released a new report yesterday titled “New Dynamics of the U.S. Natural Gas Market” (full copy embedded below). The key findings of the study will not make the anti-drilling nutters happy, that’s for sure:
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Commodity Price | Economic Impact | Hydraulic Fracturing | Industrywide Issues | Research

Moody’s Report: Shale is Here to Stay, Gives U.S. Huge Advantage
May 15, 2013

A 16-page, $550 report from Moody’s Investors Service released on Monday says shale drilling in the U.S. is here to stay, gives America an ongoing advantage over Read More “Moody’s Report: Shale is Here to Stay, Gives U.S. Huge Advantage”
Commodity Price | Exporting | Industrywide Issues | Statewide WV | West Virginia

WVU Spring NatGas Conference: $4-$6 Gas for Next "Decade or More"
April 25, 2013April 25, 2013

Several interesting speakers addressed the spring natural gas conference held by West Virginia University in Morgantown on Wednesday. Among them was keynote speaker David McCurdy, president and CEO of the American Gas Association. He told attendees he believes natural gas will stay in the $4-$6 per Mcf range “for a decade or more.”

Dominion Resources was also on hand, talking about their plan to export natural gas to Japan and India from Cove Point, MD. Highlights:

Read More “WVU Spring NatGas Conference: $4-$6 Gas for Next "Decade or More"”
Commodity Price | Industrywide Issues

One Year Later: NatGas Inventories & Rig Counts Down, Price Up 2X
April 4, 2013April 4, 2013

MDN’s favorite Seeking Alpha blogger and energy analyst, Richard Zeits, has posted a top-notch analysis about the price of natural gas and where he believes it’s headed—and why. The article is extensive and well worth the time to read it if you care about the price of natural gas. He points out “what a difference a year makes,” noting that in just one year natural gas inventory surpluses are gone (even contracting), rig counts are at their lowest numbers in decades, and the price of natural gas has doubled from a low of $2 MMBtu to near $4 MMBtu. Surprisingly, he notes that recent supply numbers for natural gas show a slight contraction overall, despite the huge expansion of production in the Marcellus, Utica and Bakken.

Zeits says the fundaments for natural gas trading look very good. He makes the following points in the article:

Read More “One Year Later: NatGas Inventories & Rig Counts Down, Price Up 2X”
Commodity Price | Electrical Generation | Industrywide Issues

NatGas Prices Inching Higher, $4 Mcf This Summer?
March 15, 2013March 15, 2013

This is not a story about the Marcellus/Utica per se, but it has a direct bearing on landowners (how big their royalty checks are) and the drilling industry (whether or not they’re willing to sink a hole) in Appalachia.

The enormous success of the shale drilling industry has been its own worst enemy in one respect: Demand for natural gas as not kept pace with the enormous flood of new supplies, and that has led to a commodity price “collapse” since 2011. Even though domestic supplies of natural gas are now at an all-time high, prices are once again inching up and it’s expected the commodity price will hit $4 per thousand cubic feet (Mcf) sometime this year—perhaps this summer. Why? The switch from coal to natgas in electric power generating plants…

Read More “NatGas Prices Inching Higher, $4 Mcf This Summer?”
Access Midstream Partners | Blue Racer Midstream | Commodity Price | Dominion Energy | Energy Services | Ethane | Industrywide Issues | Ohio | Pipelines | Processing Plants | Statewide OH

Live from Columbus, OH… Utica Shale Confab – Day 1
February 27, 2013February 27, 2013

MDN editor Jim Willis is in Columbus, Ohio attending the 2nd Utica Shale Development & Growth Forum. Jim is moderating a panel today (Wednesday) called “Utica from the Media’s Perspective.” On the panel with me are Bob Downing, staff writer with the Akron Beacon Journal, Rick Stouffer, editor of Platts Gas Business Briefing, and Peter Behr, reporter with EnergyWire. All top notch writers from premier publications. I feel honored to sit on a panel with them!

Yesterday (Tuesday) was the first day of the main program and speakers tackled the Utica Shale from their unique perspectives. We heard from the relatively new Access Midstream (formerly Chesapeake Midstream); a geologist; Blue Racer Midstream; and an economist who is head of the Ohio State University’s Sub Surface Energy Resource Center (“Utica Shale Center” for short). Since most MDN readers couldn’t be here, I took good notes to pass along. Below are highlights and interesting tidbits from Day One…

Read More “Live from Columbus, OH… Utica Shale Confab – Day 1”