Had a very bad day today. It was down almost 5%. Will soon break below $3.50. Exxon paid $41 billion for XTP (natural gas driller) some years ago. Exxon management has said that they need $5 to break even, I have heard numbers from other companies as high as $8. Question is, how long can these gas producers continue to sell below cost?
Nothing is going to stop the natural gas revolution in the USA..sure, a bunch of high cost drillers are going to get burned,particularly those stuck in dry gas areas. But deep pocket folks like Exxon will keep going nicely, and all the natural gas producers in wet gas areas of the Marcellus and Utica etc will do great selling natural gas liquids coming up with the natural gas..NRP is doing the same thing. Exports of LNG start soon,too, and will head overseas just like coal. The coal ships from New Orleans carrying NRP sourced coal will start going through the expanded Panama Canal in 2015 alongside the big LNG carriers en route China,India,and Japan.