June 11, 2021 – S&P Global
Shale gas stocks keep gaining as price moves up past $3/MMBtu and stays
By: Bill Holland
Shale gas drillers uncharacteristically kept their money in their pocket with low-cost maintenance drilling plans holding production flat at roughly 91 Bcf/d in June, analysts said. The drillers now expect to reap a windfall of free cash, a strategy investors continued to reward over the last three months, even after a year of stock outperformance in 2020. Shares in most pure-play shale gas producers showed double-digit gains in value through the June 9 market close, S&P Global Market Intelligence data showed.
"The uptick in prices has been a combination of factors, including flat production, robust export demand, and at least in June, very strong power burns given the recent heat," said S&P Global Platts Analytics' manager of North America gas, Luke Jackson. "LNG exports are going full throttle given $4-5 [/MMBtu] netbacks into the European and Asian markets."
U.S. producers have increased production by 3 Bcf/d year over year, but demand is up 5 Bcf/d, said Sheetal Nasta, managing editor at energy analysis firm RBN Energy. "This is mainly being driven by LNG export demand."
Despite the gap between supply and demand, U.S. shale gas drillers have not thrown more rigs into chasing higher prices, as they have in the past.
Read the full article here: https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/shale-gas-stocks-keep-gaining-as-price-moves-up-past-3-mmbtu-and-stays-64971190
