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Re: THE Natural Gas Thread (merged)

Unread postPosted: Wed 21 Dec 2016, 19:10:42
by coffeeguyzz
I do not know how closely you gentlemen follow the goings on in the Appalachian Basin, but to think the supply may taper/decline due to the amount of Gas In Place is highly questionable.
These past few months, several 3 to five wells per pad were drilled and brought online that showed extraordinary production numbers.
There are currently a half dozen Pennsylvania wells flowing over 20MMcfd with three dozen total above 15 MMcfd.
One well from Cabot, the King D 4 flowed 34 MMcfd in September with monthly output exceeding 1 Bcf.
Over in Ohio's Utica, Ascent brought online the 4 well Cravat pad that cum'd almost 6 1/2 Bcf its first three months.
The decline rates of these wells should in no way be compared to the Barnett's as there are significant differences.

Sweet spots being drilled out?
Apparently EQT may think otherwise as they just announced, in addition to 119 Marcellus wells planned in 2017, 81 Upper Devonian wells will also be co-developed on the same Marcellus pads.
The UD wells are showing greatly increased output from Wrightstone Energy's 2015 study postulating 100 Tcf recoverable from these numerous, shallower horizons (Rhinestreet, Middlesex, Genesee, Burket, amongst them).
In addition, EQT plans on 7 so called Deep Utica wells (12,000'+) as their exploration program continues at a highly moderated pace due, primarily, to excess product on the market.
While 3.5 to 5 Bcf EUR per 1,000' of lateral may seem like a preposterously high figure, production records from a few of the successful Deep Utica wells may validate this projection.
The productive footprint of the Utica continues to expand with successful Utica wells in Tioga, Potter, and McKean counties.

There are many, many decades ahead of highly prolific output from the Appalachian Basin.

Re: THE Natural Gas Thread (merged)

Unread postPosted: Thu 22 Dec 2016, 13:44:32
by GoghGoner
Barnett has plenty of gas-in-place but there ain't nobody drilling there. I can look at the financials of CHK, COG, RRC, etc... and tell these companies aren't doing well. They were running up debt before the price collapse. I don't understand why so many investors fell for tidbits like you just threw out. I think the tightening policy of the FED could have huge implications for how many of these companies are viable. Plenty of sucker money left out there to grab and they have to suck investors in since these companies cannot fund their own drilling.

Re: THE Natural Gas Thread (merged)

Unread postPosted: Thu 29 Dec 2016, 10:41:24
by GoghGoner
Quite a drawdown! Where is all of that Marcellus production? LOL!

Weather forecasts turns colder after next week, if we see a couple of arctic blasts, hold on to your hats.

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Re: THE Natural Gas Thread (merged)

Unread postPosted: Thu 29 Dec 2016, 22:32:06
by coffeeguyzz
Where is all that Marcellus production? Last I checked, PA, WV, OH.
Take away pipelines are close to being maxxed out, but, you are 100% correct, GG, that the coming weeks may be brutal for pricing /supply for consumers, especially New England with little over 4 1/2 Bcfd entering the region via pipeline.
The spot price at the Algonquin citygate and, I believe, Tetco M6 NY could skyrocket if there is an extended cold snap.
Next winter may be worse as there will be fewer coal burners available for backup.

Re: THE Natural Gas Thread (merged)

Unread postPosted: Fri 30 Dec 2016, 10:44:18
by vtsnowedin
coffeeguyzz wrote:Next winter may be worse as there will be fewer coal burners available for backup.

Is that a given considering the incoming Trump administration?

Re: THE Natural Gas Thread (merged)

Unread postPosted: Fri 30 Dec 2016, 12:15:59
by AdamB
GoghGoner wrote:Quite a drawdown! Where is all of that Marcellus production? LOL!

Weather forecasts turns colder after next week, if we see a couple of arctic blasts, hold on to your hats.

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Don't worry about the Marcellus. It will be saved by the Obama administration and the EPA, just as the EIA says. And all because of this....

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US LTO development might not have enough global demand growth to keep it growing in the US, but that is NOT the case for natural gas here in the US. Pincushion the Appalachian basin industry will, both the Utica and Marcellus. Make the Barnett look like kiddie play in Texas, ultimately.

Re: THE Natural Gas Thread (merged)

Unread postPosted: Fri 30 Dec 2016, 12:34:18
by ROCKMAN
vt - "Is that a given considering the incoming Trump administration?". I would assume so since I believe the caffeine fiend was referring to coal fired plants that have been decommissioned and wouldn't be available regardless of who the POTUS might be. By speaking of burning coal: are you aware that more US coal was produced in one year under President Obama then any other POTUS in history?

And speaking of NG prices/supplies sometimes the problem isn't the amount available in storage but insufficient pipeline capacity to make deliveries to the end users. I recall during a past winter when New England got hit really hard and they couldn't get NG to Boston fast enough so a local utility bought a couple of tanker loads of LNG from the spot market for around $22/MCF. Way above the price of pipeline supplies. Same problem with propane in another very cold snap: lots of propane in storage but not enough delivery trucks to get it to home owners before they ran out.

Many get pissed off when the "just in time" systems fail. Typically the same folks who don't want to pay for additional infrastructure that's not used very often.

Re: THE Natural Gas Thread (merged)

Unread postPosted: Fri 30 Dec 2016, 12:57:52
by ROCKMAN
Marcellus Shale update: during 2016 production has remained flat through out the entire year. The huge increasing surge hit a wall at the end of 2015. But all things considered still holding its own especially given the rig count has dropped from its high of 145 in 2012 to the current 45.

http://www.eia.gov/petroleum/drilling/#tabs-summary-2

Re: THE Natural Gas Thread (merged)

Unread postPosted: Fri 30 Dec 2016, 14:53:35
by vtsnowedin
ROCKMAN wrote:vt - "Is that a given considering the incoming Trump administration?". I would assume so since I believe the caffeine fiend was referring to coal fired plants that have been decommissioned and wouldn't be available regardless of who the POTUS might be. By speaking of burning coal: are you aware that more US coal was produced in one year under President Obama then any other POTUS in history?

And speaking of NG prices/supplies sometimes the problem isn't the amount available in storage but insufficient pipeline capacity to make deliveries to the end users. I recall during a past winter when New England got hit really hard and they couldn't get NG to Boston fast enough so a local utility bought a couple of tanker loads of LNG from the spot market for around $22/MCF. Way above the price of pipeline supplies. Same problem with propane in another very cold snap: lots of propane in storage but not enough delivery trucks to get it to home owners before they ran out.

Many get pissed off when the "just in time" systems fail. Typically the same folks who don't want to pay for additional infrastructure that's not used very often.

Yes but I was thinking of those coal plants running this winter that have not yet begun the decommissioning process. Some of those were going to close this summer for no other reason then Obama's EPA wanted them closed.
If I was the owner of one of those I would not take any point of no return actions until I had a firm read on the next administrations policies.

Re: THE Natural Gas Thread (merged)

Unread postPosted: Fri 30 Dec 2016, 17:48:25
by coffeeguyzz
Vts
At this point it is the economics more than the politics.
The huge, old, Brayton Point coal burner is definitely closing this coming spring.
Problem is, the 8/9 months of highest electric useage (300-400 Mw days) occur when natgas and nuclear can pretty much handle it, and do it more efficiently with the gas plants cranking up and down during the day.
At least one of the coal burners in NH is up for sale, I believe, but no one wants to buy it.
The Pilgrim nuclear plant will be around two more winters after this one when it, also, is scheduled to be decommissioned.

Re: THE Natural Gas Thread (merged)

Unread postPosted: Fri 30 Dec 2016, 17:55:16
by coffeeguyzz
Rock
Enno Peters just released an update on the Pennsylvania Marcellus on his site shaleprofile..com.
He does great work and added some enhancements this time around including cumulative productions for the wells shown in grahic display.
While I am pretty familiar with the numbers, it is still impressive to see about 150 wells with cums above 9 Bcf after just a few years online.

Re: THE Natural Gas Thread (merged)

Unread postPosted: Fri 30 Dec 2016, 18:33:12
by ROCKMAN
Coffee - If you look at the Marcellus section of the link I posted what's impressive is how the productivity per newer wells has increased significantly. I suspect it's as much or more due to improved methodology then just culling out the poorer prospects. And still waiting for more pipelines to open up the market. While production has been flat for the entire year the MS is far from dying IMHO.

Re: THE Natural Gas Thread (merged)

Unread postPosted: Fri 30 Dec 2016, 19:09:26
by coffeeguyzz
Rock
I've accessed the site Marcellusgas.org for a couple of years now and it has an incredible amount of data on all 15,000+ permitted unconventionals as well as the 7,000+ producers.

This last few months' production reports consistently showed numerous 4/5 well pads coming online with monthly output regularly running 500/900 MMcf per well and only slightly declining the ensuing months.
These wells are primarily located in prolific Susquehanna and Bradford counties (also a few Greene and Washington), but the increase in stage count, more closely spaced clusters, and huge proppant amounts has caused much of the bump.
The operators now have a few years familiarity under their belts and can optimally drill and place these laterals.

Re: THE Natural Gas Thread (merged)

Unread postPosted: Fri 30 Dec 2016, 20:11:15
by Synapsid
coffeeguyzz,

Thanks for all the information you supply on the NG situation up there in the Basin. We don't get it anywhere else that I come across.

Re: THE Natural Gas Thread (merged)

Unread postPosted: Fri 30 Dec 2016, 22:26:46
by ROCKMAN
Caffeine junkie - Dito. I usually just hit the general data from the EIA. But I suspected they were upping their game in the MS as they've been doing in the EFS.

Re: THE Natural Gas Thread (merged)

Unread postPosted: Sat 31 Dec 2016, 08:54:06
by GoghGoner
coffeeguyzz wrote:The spot price at the Algonquin citygate and, I believe, Tetco M6 NY could skyrocket if there is an extended cold snap. Next winter may be worse as there will be fewer coal burners available for backup.


It has already had one spike above $10, I think. We should see some fireworks in the coming month or two, if the rest of the winter turns out colder than average in that area. They were supposed to be importing more LNG by now, but we all know how much the energy companies know how to forecast trends.

New England natural gas pipeline capacity increases for the first time since 2010

The $972 million AIM project will bring additional natural gas from the Appalachian Basin into New England. The project is the largest pipeline project since 2007 to transport natural gas into New England from outside the region. The pipeline will provide an additional 342 million cubic feet per day (MMcf/d) of pipeline capacity to the New England market.

The $63 million Salem Lateral Project will provide capacity for the Salem Harbor Power Plant, a converted coal-to-gas electric power plant due to be in service in June 2017. Once completed, the 674 megawatt power plant will use up to 115 MMcf/d of natural gas to generate electricity for New England consumers.


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Re: THE Natural Gas Thread (merged)

Unread postPosted: Sat 31 Dec 2016, 09:22:01
by ROCKMAN
Goner - Yes, the spot LNG market can be brutal. They don't tend to advertise it but some LNG contract buyers will pull some of their supply and sell to a spot buyer. There's LNG contract prices out there at less then $8/MCF. Turn a few loads to needy utilities for $20+/MCF and pocket some nice change. And since most utilities price delivery on a cost+ basis paying out the ass for spot LNG doesn't bother them: they make $X per Btu regardless what the NG costs them.

BTW we always talk about oil futures but there are also a few LNG futures markets out there:

http://www.cmegroup.com/trading/energy/ ... -swap.html

Re: THE Natural Gas Thread (merged)

Unread postPosted: Sat 31 Dec 2016, 09:40:22
by GoghGoner
That LNG price is interesting -- I knew the prices are gone up the last couple of months but I didn't know they spiked like that. Newcastle coal futures are still in backwardation and the current contract up 130% on the year. LNG probably has quite a bit more room to run. A natural gas shortage in the US isn't going to help relieve that pressure.

Re: THE Natural Gas Thread (merged)

Unread postPosted: Sat 31 Dec 2016, 10:37:47
by ROCKMAN
Goner - Have you followed the chat about the US potentially being on the verge of becoming a long term NET NG exporter? Some folks seem to feel that's a good sign for the country. It isn't: it doesn't represent an excess of domestic supply as increased competition from foreign buyers who are outbidding local buyers. Exports like the booming Mexican pipeline market and Asian LNG market. As I pointed out good news for us domestic NG producers. The consumers...not so much. For instance what happens to US KNG exports if/when the global LNG market juimps from $8/MCF to $15+/MCF? Companies are going to spend many tens of $BILLIONS on those new LNG terminals to not ship NG out of the country.

Re: THE Natural Gas Thread (merged)

Unread postPosted: Wed 04 Jan 2017, 10:26:16
by GoghGoner
Yeah, Rock, when it takes years to implement changes (ie. LNG exporting/importing) and it is based on a crystal ball...

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