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Natural gas prices peaked at $13 in 2008 only to quickly collapse, briefly reaching a low of $3 in September 2009, before generally leveling out between $4 and $5/mmbtu. With futures consistently indicating a quick return to levels of $6, or higher, companies have invested enormous amounts of capital to acquire and develop newly discovered unconventional assets. Since July, that bubble has burst with NYMEX Spot reaching the low $2.20’s – IN JANUARY!  What are the drivers of this sudden downturn in prices? What is the supply side  interplay of storage levels, rig counts, lease expiries, capital commitments, expanding pipeline capacities and continuing technological advancements? When will demand arrive like the cavalry to soak up this excess supply? Through what mechanisms? Will exports play a significant role? Ms. Barnes will shed some light on the fundamentals behind this movement and provide us with her thoughts on the future.

 

With this stormy forecast, how are established and new growth E&P’s to chart a course through this challenging economic environment? Do their plans differ with scale, location, and age? Do they join the stampede to high liquid yield unconventional plays? Or batten down the hatches to sail through the cyclone while remaining dry gas focused. Are their contrarians who view this as an opportunity to acquire gas reserves “on the cheap”?