Thursday, October 14, 2010
There’s a growing divide in the North America gas industry.
Liquids or non.
The always hawkish energy eye of Colorado’s Bentek Energy recently observed the growing effect of liquids-rich plays on the U.S gas production profile.
Speaking at a National Energy Services Association forum last week, Bentek managing director Rusty Braziel noted just how critical liquid-rich gas plays are becoming. Said Braziel, “Some companies could sell their liquids and give the gas away for free and still make money.”
This is an important point for anyone investing in natural gas. High-value liquids from plays like the Eagle Ford shale in Texas make producers in these areas somewhat insulated from gas prices. Even at low prices, producers can keep running these wells at a profit.
This flies in the face of conventional wisdom. Which suggests that “low prices should cure low prices” by forcing producers to shut in wells, ultimately decreasing output and raising bidding for the remaining supply.
To read this article in full, please visit: www.thedailycommodities.com.