Party Over: E&Ps Eye Flat Strips Warily as 2012-13 Hedges Expire

摘要

Casey Sattler, the editor of NGW sister publication Energy Intelligence Finance, says she found the mood at Pritchard Capital's recent energy conference in San Francisco more dour than upbeat as low gas prices begin to catch up with the industry. "Hands down, $3 per million Btu gas prices usher in a whole new level of pain for producers than $4 gas ever did," she writes. "Complicating matters is the flattening forward price curve, which, despite having a dismal track record as a price forecaster, has a much greater influence on how companies plan their drilling programs than short-term cash prices do. So with calendar 2012 futures standing around $3.30/MMBtu and the 2013 calendar strip still under $4, the light at the end of foe tunnel looks awfully distant. Indeed, one has to go to January 2016 to find a futures price above $5.