January 26, 2012
By Jim Forsyth
Natural gas drilling operations in the Eagle Ford shale and elsewhere are being drastically reduced because the spot market prices of natural gas have hit their lowest prices in a decade, 1200 WOAI news reports.
Analysts like Bud Weinstein of the McGuire Energy Institute at Southern Methodist University say a combination of the historically warm January weather in the northeast and Midwest, where most homes and utilities burn natural gas, plus the massive amounts of new production, have pushed prices down to half of their levels in 2008, and one third of their levels in 2005.
“We just have too much gas,” Weinstein told 1200 WOAI news. “There is too much production relative to demand, and that is because of these prolific finds in the various shale fields around the country.”
Chesapeake Energy, which calls itself ‘America’s Champion of Natural Gas’ and is one of the largest drillers in the Eagle Ford, is a partner with Chinese firms to exploit natural gas supplies some 11,000 feet below the Texas Brush Country, and has options on 600,000 net acres. But Chesapeake is announcing it is cutting back on it’s drilling in several natural gas plays, simply because the prices are so low, that only the least expensive wells are profitable.
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