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Range Resources Corporation Message Board

  • joelm_shapiro joelm_shapiro Oct 28, 2012 2:25 AM Flag

    Nat gas is poised for a spike

    You can't stop drilling wells and expect production to stay flat. Even with associated gas from condensate drilling, ECA is forecasting 2013 dry gas production 11% BELOW 2011 production. If that happens industry-wide, production will be close to 21.5 TCF. With demand above 25 TCF, the rigs need to come back by January or we are going to run out of gas. After accounting for the estimated 1000 uncompleted wells around the country, I figure you still need another 3000 wells+. To drill them will require another 300 rigs minimum running year-round starting in January. $3.50 won't get another dry gas well drilled. $5.50 may bring back a few rigs, but I suspect the industry is going to be very reluctant to bring back any rigs out of fear of crashing the price again. I think the price is going to have to overshoot on the upside to $8+. Any thoughts?

37.20-1.39(-3.60%)Oct 21 4:00 PMEDT