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SandRidge Energy, Inc. Message Board

  • retiredgm65 retiredgm65 Sep 5, 2013 4:00 PM Flag

    natural gas rigs at 380 down 13% for the year

    At a point in time depletion rates are going to effect supply which also down year over year. Rainbow has a better feel on this than I do.

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    • According to my rough calculations, there were 1,700 wells awaiting completion in the Marcellus as of 6/30. With the recent addition of new pipelines and infrastructure a lot of these wells are now getting hooked up - far more than what are currently being drilled yet supply is not increasing. By EOY, most of this surplus will be worked thru and at that point or within the next quarter or two thereafter, we will see supply finally start to decline. Commensurate with the supply decline will be a steady ramp up of demand drivers, so it is highly likely that NG storage will start to get drained in 2014.

      And don't expect a radical reversal of the trend of declining supplies and storage levels. It took 3 years for the E&P companies to shift from NG to liquids and will take at least that long for them to shift back. The backside of the NG curve is going to need to be in the 5.50 to 6.00 area or higher for a minimum of 3 years out before any significant shift of CAPEX heads to NG.

      There will be virtually no increase in CAPEX for dry NG in 2014, and NG pricing should accelerate thru 2017.

      • 2 Replies to rainbow3100
      • rainbow, to a man up to his eyeballs in upl and chk options for 2015, that's music to my ears. the sector is due a big swing.. wouldn't you think, however, that this would make now an opportune time to buy natural gas producers who are sitting on a lot of inventory where they can easily and cheaply accelerate production? it would seem to me that the biggest fish would be swallowing the little ones soon, rather than waiting until the value is apparent and paying more.

      • To add, AK just had its coldest AUG on record if memory serves. Further, weather analysts are calling for cooler temps than normal and some are saying we are headed for a wicked winter........all of which accelerates demand as usage ramps up!
        I don't really care for the snow but now suddenly, I LIKE IT !

 
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