Pittsburgh (Platts)--15Oct2012/511 pm EDT/2111 GMT
Natural gas prices between $4/MMBtu and $5/MMBtu will trigger a return to large-scale drilling in the nation's dry-gas plays, executives said Monday at Platts' 5th Annual Appalachian Gas Conference in Pittsburgh. "Consistent pricing above $4/MMBtu must be in place before we move back into dry-gas plays," said Chad Stephens, Range Resources' senior vice president of corporate development. The exception would be the Marcellus Shale, where roughly 1,200 completed dry-gas wells in northeastern Pennsylvania sit waiting for higher prices and/or pipeline hook-ups. Article continues below... Request a free trial of: Gas Daily Gas Daily offers the most detailed coverage of natural gas prices at interstate and intrastate pipeline and pooling points in major U.S. markets. Gas Daily keeps you informed about complex state and federal regulations that affect competition in the gas industry.
Natural gas prices between $4/MMBtu and $5/MMBtu will trigger a return to large-scale drilling in the nation's dry-gas plays, executives said Monday at Platts' 5th Annual Appalachian Gas Conference in Pittsburgh. "Consistent pricing above $4/MMBtu must be in place before we move back into dry-gas plays," said Chad Stephens, Range Resources' senior vice president of corporate development. The exception would be the Marcellus Shale, where roughly 1,200 completed dry-gas wells in northeastern Pennsylvania sit waiting for higher prices and/or pipeline hook-ups.
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Gas Daily offers the most detailed coverage of natural gas prices at interstate and intrastate pipeline and pooling points in major U.S. markets. Gas Daily keeps you informed about complex state and federal regulations that affect competition in the gas industry.
Current month-ahead prices in the $3.50/MMBtu range have caused a notable slowdown in the dry-gas region, but the spigot isn't close to being turned off, according to Jennifer Robinson, a senior analyst at Platts' unit Bentek Energy. "Dry Marcellus development continues at a rapid pace," Robinson said. The Marcellus as of October 5 was down about 48 rigs year-to-date, but the physical relocation of rigs to wet-gas and oil-rich plays elsewhere is not impacting gas coming out of the ground, she said. "In 2011, production in the Northeast [primarily the Marcellus] was a little over 5 Bcf/d," Robinson added. "Right now, we're at 9 Bcf/d." And that might be only the beginning, as Robinson told the audience that within a little more than a decade, the Northeast could be producing more than 22 Bcf/d. Return on investment keeps rigs running in the Marcellus, Robinson said. In the dry-gas portions, the the return is 19% while in the wet-gas areas, which include southwestern Pennsylvania and the West Virginia Panhandle, the return jumps to 47%.--Rick Stouffer, richard_stouffer@platts.com --Edited by Carla Bass, carla_bass@platts.com
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