Medicine Hat,aka'Gas City,’to Shut 2,000 Gas Wells Amid Price Collapse

摘要

In another ominous sign for Western Canadian producers,Medicine Hat —commonly known as Gas City—plans to permanently shut in more than 2,000 unprofitable gas wells by 2022.The move to abandon and reclaim the wells stems from the southeastern Alberta city,which runs its own municipal gas and oil drilling operation,losing roughly C$30 million a year thanks to a prolonged slump in wellhead prices.It costs the city on average roughly US$2.80 per million Btu to produce gas,far above the average price so far this year at Alberta's Aeco hub of $ 1.25/MMBtu,according to Natural Gas Week assessments.”And a sustained pricing recovery in natural gas is not expected in the foreseeable future,”Commissioner of Energy and Utilities Brad Maynes said in announcing the decision last week.”We have worked hard for years to make our division profitable again,but this is a market phenomenon happening across North America — this is the new normal.”