I read the price of natural gas was negative… will it go back up to help our wells pay more. Or does this dropping price hurt the mineral owners alot??
Fwp 1031, I don’t like the sound of this one bit. Fwp, have you ask M Barnes her opinion? She is an expert opinion. Don’t delay. I am awaiting a D O (Division Order) on 4 (FOUR) new ‘increased density’ wells Hughes County, OK. My minerals are a ‘GAS PLAY’ ON S21/07N/10E and hopeful for a “sweet $$$$ return.” Operator Trinity, Houston Tx.
Price drops hurt both the operator and the mineral owner.
If the price of natural gas was negative in Oklahoma, it would be national news. Natural gas has been in the ~$2.50 range and will float between there and $3.00 likely for the next year or two.
Natural gas prices have gone to “negative” in some parts of the Permian Basin of Texas, particularly the Waha Hub, however those operators in that area are drilling for Oil anyway and are able to make a profit flaring off all of the associated gas. No natural gas from Oklahoma is traded at Waha.
The falling gas prices in the Permian Basin are due to lack of infrastructure and will adjust once more pipelines are available. Oklahoma does not have the same problems. Hughes has a very nice grid of pipelines, so you don’t need to worry about it there.
The good natural gas wells usually last 10 or so years is what I read somewhere on here. Is that correct. Hughes county is supplying alot of places. We need them to keep rolling !
Obviously rates will decline over time, but those wells will typically produce for 30+ years
Huge value drops after first years production or is it gradually decreased. ?
The answer needs to be split into two pieces.
If the well is a horizontal well, then the PRODUCTION decreases steeply in the first few years and then flattens out to a slower decline and it may last for decades. We call it the hockey stick shape. The blade is the high production and the stick is the decades of low production.
The VALUE will depend upon the prices of oil and gas which will vary over time.