Well Freeze-Offs Likely, But Producers Unfazed

Wednesday, October 26, 2011

After two straight years of production freeze-offs during extreme cold spells, gas producers are generally unfazed by recent weather forecasts calling for a similar occurrence this winter even as analysts said the recent shift to liquids-rich plays could make production more vulnerable.

Last winter, up to 8% of gas production from the Rockies to Texas was shut in because of freeze-offs, according to Bentek Energy, a unit of Platts. As a result, regional spot prices jumped as a much as $1.50/MMBtu within a day.

"Last year was severe, but it was an unusual event," said Matt Marshall, senior analyst at Bentek. "You can't say, 'Let's plan for a cold-weather event that occurs once every 60 years.' "

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