Friday, December 18, 2009

Spot Price Improves

Every day this week, the Henry Hub spot price of natural gas increased.  I am fairly certain I haven't been able to say that this year.  In fact, it's probably been more than 18 months.  Also, for the first time this year, today's spot price ($5.87/MMBtu, +22 cents, +3.9%) is higher than the price on the same day last year (Dec. 18, 2008 = $5.63).


Anonymous said...

This may be a total coincidence and I realize that completion info is a couple of months behind. I notice that recent Chesapeake completions have come online with a higher IP than completions over the summer. This leads me to wonder if this signals that production curtailment has been lifted, at least for the moment and to some degree. What are your thoughts?

Robert Hutchinson said...

I think it has more to do with their completion techniques and possibly more "fertile" drilling locations. I don't think the IP rates reflect production curtailments.

In the company's earnings call a few months ago, management indicated that it was going to lift voluntary curtailments since other companies were not joining in. I don't know what CHK's policy has been lately.

Perhaps the best news from the curtailment perspective was the greater than 200 Bcf withdrawal from storage.