- Blog

Oil Production Hit Harder by Isaac Than Natural Gas - Compared to Katrina

Author Sandy Fielden

In the immediate aftermath of disasters like hurricane Isaac, our thoughts focus on the victims and the tremendous damage to homes and infrastructure alike. As a category 1 hurricane Isaac has not so far shown the destructive force that its infamous predecessor, Katrina did in 2005.  In particular energy infrastructure has been shut in by Isaac as a precaution but appears not to have suffered lasting damage. The Gulf of Mexico remains an important center for US crude oil and natural gas production. Today we compare the production shut ins caused by Katrina and Isaac and their impact on the national picture.
- Blog

You Can Pay Me Now, Or Pay Me Later – Does it Make Sense Shut-In Natural Gas?

Author Rusty Braziel

With natural gas prices hanging at numbers around $2.50/MMbtu and possibly headed lower, there is a lot of talk about shut-ins.  Presumably going out to the wellhead and turning off the valve.  A couple of weeks ago, Jim Hackett, Anadarko CEO told a Rice University audience that “at current gas prices, gas operators can't sustain profitable domestic operations. By shutting in some of their wells, prices quickly would rebound.”  Is that true?  Is it a good idea?
- Blog

Shut-in by Press Release – Part Deux

Author Rusty Braziel

We finally got that press release warning of shut-ins from Chesapeake, and it had the expected impact on price.  Feb was up 18.2 cents to $2.525.  The market was oversold and the smart money had gone long, so it was the perfect triggering event for a bump up.  But as we said a couple of weeks ago in Shut In by Press Release, beware of producers bearing gifts.   The economics of shut-in rarely make sense.
- Blog

Shut-in by Press Release

Author Rusty Braziel

Front page article today in the WSJ “Glut Hits Natural Gas Prices”.  With front month futures hitting $2.774/MMBtu (lowest front-month price since Sept. 2009, lowest winter since 2002), and Henry Hub cash at $2.808/MMbtu), the non-energy world is finally starting to absorb the magnitude of the shale overhang.  Heck, this would have happened in 2010 and 2011 if weather had not saved the day.  This year, no weather and no save.

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