high BTU

The ratio between crude oil and natural gas (NYMEX) futures yesterday was 31.8. That is crude prices in $/Bbl were 31.8 X natural gas prices in $/MMbtu. In the 10 years from August 1997 to August 2007 the ratio averaged 7.5 X – that was the old world. Since August 2007 the ratio has averaged 19.4 X – with a dramatic rise during the last year to dizzying heights over 50 X. A major shift to high liquid hydrocarbon production has ensued. Now the futures market indicates the ratio will halve from 31 X to 15 X by 2020. Today we review the prospects for a return to a more normal crude to gas ratio.

This is how midstreamers at the Platts conference talk about the Eagle Ford?  Sounds more like a description of my wife’s Havanese after a bath than a description than one of the most prolific NGL plays on the continent.  But these weren’t really complaints.  It was just midstreamers pointing out some of the challenges of life in the Eagle Ford NGL business, circa 2012.  And of course, these are certainly white collar problems.  This is another blog based on presentations at the Platts Midstream conference.  Today we’ll look at each of the three issues from the title and pick a couple of examples of solutions and strategies being used by players in the South Texas area.