Chesapeake describes response to low natural gas prices

The Daily Review, Towanda PA ^ | January 25, 2012 | ERIC HRIN (Staff Writer

[Cricket24]

TOWANDA - Low natural gas prices are resulting in some changes at Chesapeake Energy.

This week, The New York Times News Service reported that Chesapeake Energy announced that it would cut gas production "in response to plummeting prices."

In a news release, Brian Grove, Senior Director - Corporate Development for Chesapeake based in Chesapeake's Towanda office, explained the effects locally.

He said that "in response to natural gas prices that are at their lowest in a decade, Chesapeake is redeploying some of its rigs from areas with dry gas to expand production in liquids-rich areas, which are delivering superior economic returns."

[Cricket24]

I wonder if the rumors of a natural gas moratorium by the Obama administration is figuring into this. I thought it was just a rumor put out there to see the reaction of the public but maybe Obama will do this to shore up his left support even more???? Or maybe it's just because of low gas prices like the article states. Time will tell.

[Recon Dad]

I am unaware of any moratorium being considered, but if there were I would expect just the opposite, higher prices.
With all the recent discoveries of NG I would put my money on supply and demand, go where it’s most profitable.

[Dusty Road]

We’ve got 58 rigs running nth of town all going after the Wolf Berry, not the volumes of gas you get from the Barnett of the Haynesville but lots of liquids.

[meatloaf]

I think you’re exactly right. Barring an increase in the demand for natural gas without the other liquids, the supplies in this country are gargantuan. It would be a perfect time to start converting vehicles to multifuel and for Detroit to start producing them. That would put a big dent in the demand for imported oil and screw with oil profits for Middle Eastern countries after the US demand dropped.

[Recon Dad]

Instead of sinking money into windmills and solar the direction should be towards converting NG to.....

Petrobras, the Brazilian based petroleum firm is reported to have qualified and approved a new technology to convert natural gas to synthetic crude oil. The Petrobras’ CENPES Research and Development Centre completed its trials of the CompactGTL unit prompting Nicholas Gay, chief executive of CompactGTL to say, “The [Petrobras] test program has produced some extremely positive results and has shown the plant can be robust, with the operational availability (the percent of time a unit would operate) expected of large scale commercial facilities. We can now progress our plans in conjunction with clients throughout the world to develop commercial scale modular gas to liquid plants.”

The article (this is just a paragraph) was less than vague as to the costs of the conversion.

[Cletus.D.Yokel]

Chesapeake appears to be going all-in on rich gas. Just heard a rumor that they are laying pipe to tie-ins without finalized easements.