Uncompleted Well

The CME/NYMEX Henry Hub natural gas futures price averaged $2.64/MMBtu in September, the lowest level for any September since 2001, and it continues to hover at a similar low for October so far. Rig counts are down nearly 60% since December 2014. The market is on high alert for the first sign of production declines that might encourage higher prices – believing this to be a matter of sooner or later. Yet natural gas production has been hitting all-time records. Today we look at monthly natural gas production data from the Energy Information Administration (EIA).

This month the North Dakota Industrial Commission (NDIC) indicated they are leaning towards leniency in their treatment of operators that have drilled but not completed wells within the one-year time frame permitted. Instead of assuming such wells are abandoned, which would otherwise mean an expired drilling permit and about $200,000 in plugging costs,  – the State plans to give operators more time. That possibility opens up a whole new underground storage option for producers struggling to make ends meet. Today we explain the NDIC plan.