I suspect the operators are all banking on much higher gas prices, pretty soon, and for the long term. Otherwise their behaviour doesn't make much sense.
Does the economic model require them to keep developing and producing wells, even at a loss, to keep the machine ticking over while they await higher prices?
My understanding is its fairly easy to shut-in gas wells and common since storage is limited. Gas in general is produced on a more as needed basis vs oil. But it makes more sense to wait. I'd have to guess a lot of these wells where drilled anticipating higher prices now not in the future.
Comments can no longer be added to this story.
The contents below are paid advertisements. Their appearance does not imply an endorsement by The Oil Drum.
-->
“First they ignore you. Then they laugh at you. Then they fight you. Then you win.”
k Nation (Jim Kunstler)
GAIA Host Collective
I suspect the operators are all banking on much higher gas prices, pretty soon, and for the long term. Otherwise their behaviour doesn't make much sense.
Does the economic model require them to keep developing and producing wells, even at a loss, to keep the machine ticking over while they await higher prices?
My understanding is its fairly easy to shut-in gas wells and common since storage is limited. Gas in general is produced on a more as needed basis vs oil. But it makes more sense to wait. I'd have to guess a lot of these wells where drilled anticipating higher prices now not in the future.