SubscribeChesapeake CEO Says Natural Gas to Cheap to Stimulate Production
U.S. natural gas prices will have to move higher to spur a resurgence in drilling activity and keep output of the fuel steady, the head of Chesapeake Energy Corp (CHK.N) said on Wednesday.
(skip)
"The industry can cope with $4 gas. The industry can’t grow or sustain production with $4 gas," Chesapeake CEO Aubrey McClendon told an IHS Herold energy conference.
(skip)
"We at Chesapeake think that price has to be three times the finding costs, and that translates to $6 to $9 in the next 12 months," McClendon said.
A price in that range would likely prompt producers to increase the number of rigs drilling new wells to 1,100, he said.
My comment: As I said the other day I am playing this through some royalty trusts so that I can get paid while waiting for the natural gas price to rebound. I have seen the 1200 rig number mentioned before as the number needed to keep supply/demand in balance.
John Polomny
The Real Deal
Loading ...
