I was recently given an opportunity to obtain a formerly producing gas well (it produced for 18 months before its pipe caved in under extremely high pressure). During its operation, it had revenue of $1 Million. The operator (like many in the “patch,” believes it has demons) does not want to put any more dollars into it. He knew that he had thin, inferior pipe when it was completed, but got the pipe on a trade-out, and thought he would use it out of respect for his partner.
But, after consulting with clients of mine in the oil/gas industry I decided not to promote. The most compelling recommendation was from a man that said that with the falling price of gas, and $100/bbl for oil, most rigs are being shifted to drilling for oil. They can charge more!
Yes, gas is available. But oil is more profitable now. Gas will have its time. It reminds me of a question I ask my clients occasionally: Would you rather have $1,000 or $100? They all choose correctly.
Gwjack
As we can see from the charts linked below, most of the growth in the active rig counts has been in oil for the last 18 months.