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Adroit Executives are speculating the price for natural gas in the US will rise substantially from levels just over a year ago
Adroit Executives are speculating the price for natural gas in the US will rise substantially from levels just over a year ago. This rise could rejuvenate the drilling for natural gas in the next couple years. Natural gas prices have increased dramatically from this time last year, which currently is at $4.16 per MCF (Thousand Cubic Feet). It was less than half that amount this time last year selling at $2.03 per MCF. When the price of Natural gas reached a very low point, as it did in May 2012, drillers usually step away from Gas drilling and focus more on oil plays. Some operators will even shut in producing wells because of low prices.
“We have seen that prices for natural gas have risen to the point where companies will start exploring and producing natural gas more aggressively because now there is a larger profit to balance the risk.” said Gary Giles with G & F Oil, Inc. (G & F Oil, Inc is the operator of Adroit Oil and Gas’ Ragle #7, Palo Pinto, and Carter “A” joint ventures)
If the price of natural gas stays above $4.00 an MCF, which we are confident that it will, this will drive the exploration and production for natural gas by drilling companies.
We are confident that the price of natural gas will ramp up thus increasing the amount of drilling permits filed each month compare to the number we are currently seeing. However to sustain drilling and exploration for natural gas, the pricing will need to remain consistent and not fluctuate. Mr. Giles also stated that associated gas wells (Natural gas produced from the extraction of oil) will come back online first, before drilling will begin for any new gas wells.
The Adroit Group