I would say that "investment" has collapsed as measured by the rig count. Along those lines, the CEO of UPL has stated that current low levels of investment will not support continued production in the 65 BCF/d level. However, current production has yet to turn down, but he is looking for it to do so later in the year and continue to fall in 2014.
So, NG production has not collapsed, but investment has, which will lead to production drops later in the year. However, there is a time lag as industry wide investment has been falling since spring of 2012.
Because of that time lag, I took gains on several of my NG positions, but look to be a buyer again if NG backs up to the $3.70-$3.75 area.
Industry wide, many producers are not expecting to ramp up investment until NG gets above $5 and looks like it will stay that way-then the time lag will work the other way. Investment may increase, but actual production increases may not come on stream, to offset existing wells normal and natural declines, until a year or so later.
Bottom line, for most producers, other than for cashflow needs, it is better to leave NG in the ground rather than bring it market and sell for less than $5. So, buy NG when it is cheap and out of favor and wait for eventual production declines to drive prices higher. Be a seller when the market price for NG over shoots over lets say $5.25 as new supply will come on line-with a time lag taking prices down. This sawtooth pattern should go on for the next several years, with NG getting to $10 in 3-5 years.
Remember the energy equivalent vs oil is 6/1. So with oil at $90, NG at $15 is an even tradeoff-BTU wise. NG most likely will not get to BTU parity, but it certainly can get to 66-75%.