All signs point to continued high natural gas prices, and continued challenges to adding gas supply, three speakers said in a wide-ranging, Q&A-style discussion at the IPAA's midyear meeting last month. Natural gas supply is decreasing in Canada, said John Richels, president, Devon Energy Corp. 2007 daily production could be down by as much as 1 billion cubic feet, as the year-over-year rig count is only half what it was in 2006, and the heavy-oil-sands projects are using more gas. "A number of companies, including our own, have scaled back by a significant amount," he said, given competition for, and the high costs of, personnel, supplies and services. "This is having an almost immediate effect on gas supply. It's a fairly mature basin-unlike what we said back in the 1990s, when we thought it was under-developed. If we don't see a significant increase in drilling activity this winter, the supply decrease will be all that much greater." Richels said it looks like the MacKenzie Valley pipeline project is "just a pipe dream for now. The Canadian government has dropped the ball and the industry can't make the economics work." For more on this, see the July issue of Oil and Gas Investor. For a subscription, call 713-260-6441.
Recommended Reading
Texas LNG Export Plant Signs Additional Offtake Deal With EQT
2024-04-23 - Glenfarne Group LLC's proposed Texas LNG export plant in Brownsville has signed an additional tolling agreement with EQT Corp. to provide natural gas liquefaction services of an additional 1.5 mtpa over 20 years.
APA Corp. Latest E&P to Bow to Weak NatGas Prices, Curtail Volumes
2024-05-07 - APA Corp. plans to curtail gas and NGL production in the U.S. owing to weak Waha prices but remains confident it can deliver in the Permian Basin, CEO John Christmann said during a quarterly webcast with analysts.
Kissler: Mideast Tension Elevates Crude Prices—But for How Long?
2024-05-09 - Producers should be aggressive in locking in desirable crude oil prices on an abnormal market strength.
US Drillers Cut Oil, Gas Rigs for Third Week in a Row
2024-05-10 - Baker Hughes said oil rigs fell three to 496 this week, their lowest since November, while gas rigs rose one to 103.
The Secret to Record US Oil Output? Drilling Efficiencies—EIA
2024-03-06 - Advances in horizontal drilling and fracking technologies are yielding more efficient oil wells in the U.S. even as the rig count plummets, the Energy Information Administration reported.