Catch the Cat
update. WSJ has a video on the article.. Author predicting gas hitting $1!!!
It's been an interesting week for natural gas prices. So you have to have spent a little time on Wall Street to really appreciate this. So heading into last week a building news story was the nearly historic lows in the natural gas markets... mentioned in this post last week.. and I still wonder why I catch no stories in the state on the state of the royalty check.
Then.. several big announcements that some of the big shale gas developers were cutting back big time. Was the goal to cut back production. Certainly to a degree, but you often don't see companies going out of their way to tell the world they are cutting back at the core business. The problem these folks faced were such low prices for what they were selling that they goal was to get the prices up. So there was big incentive to let the world know supply was theoretically coming down and push the prices up in the market. Was supply really going to be cut back as much as the news implied? Who knows, but you can be sure this was all being played up as much as could be.
On a side note did you catch this: Columbia Gas Customers May Pay More. Folks out there were saying that Marcellus shale gas had a higher energy content than other gas. So I thought that was a good thing right.. Pay for same about of gas, but get more heat out of it? Gas bill will go down accordingly. No.. of course not. It must be true the gas has more energy and the switch described in the article that the company is switching its cost structure from cubit foot to BTU will prevent that savings from happening. Kind of an inductive bit of evidence that indeed the Marcellus gas burns hotter. I guess the idea of me selling less gas for the amount of heat I needed didn't work for them.
I do have a serious question if there are any petro-geologists out there. Can you completely shut-in a shale gas well once it is producing? and I wonder how many PA landowners negotiated any form of a shut-in royalty? Do you get royalities for gas flared off?
Maybe cat falling with knife in paw is the appropriate metaphor?
and I still don't know if that cat is dead or not?