Fracking we Won! The Free Market is speaking
and why did I not get the memo? The 2013-2014 winter has been breaking decades old records for both cold and snow demand for natural gas has gone up. Demand for Natural Gas $ 4.64 has even gone above the $4 break even point for Fracked Natural Gas.
$4.64 price Natural gas http://www.bloomberg.com/energy/
$4 is the break even point for Fracking.
I honestly don’t think that has ever happened before so everyone should be making money off of Fracking from Chesapeake the largest pure play Fracking company.
Chesapeake executed an adroit escape, raising nearly $5 billion with a previously undisclosed twist: By gouging many rural landowners out of royalty payments they were supposed to receive in exchange for allowing the company to drill for natural gas on their property.
When the first gas flowed from the well on Drake’s land in July 2012, it was abundant, and the royalty checks were fat. “We was hoping to get these loans paid off…with the big money,” said Drake, who earned more than $59,400 from the first few months of production, referring to the mortgages on his farm
A few miles away, the same month, his brother-in-law had 94 percent of his gas income withheld to pay for what Chesapeake called “gathering fees.
to Shell oil company who despite Natural Gas reaching a price larger than the break even point announced
“Some of our exploration bets have simply not worked out,” Shell’s Chief Executive Officer Ben van Beurden said. It was bad management policy to commit close to $80 billion in capital on its North American portfolio and still lose money. Now, he said, it’s time to cut the loss and slash exploration and production investments by 20 percent for 2014.
In addition to trying to cutting investment 20% Shell says they might have to sell their Eagle Ford Texas Natural Gas shale play. It sounds to me as if Shell is trying to scale back and even unload its Natural Gas right as Natural Gas prices go past the break even point for possibly the first time ever? What Do they know we don’t/ Do they know America won’t go to war with the Ukraine and Russian Natural Gas will still flow cheaper than Liquid Natural Gas? Do they know that Global Warming is real and they can’t depend on freak cold spells to drive up natural gas prices?
Imagine getting $59,400 total in a few months from Chesapeake when natural gas was losing money then getting 94% of that cash withheld when natural gas is actually making money there is obviously more to this story than we know but none of what we know suggests Fracking is making money. Normally when price increases production increases and workers get paid on time.
Next thing to think about is lets remember this happened in Rural Areas that vote GOP. I think the GOP is going to have a tough time getting their base motivated this year. Sure Hilary is a Girl Icky/s Sure Obama is still President…and he’s Black! But nobody laughs off a 94% loss on $59,400 of income in a few months and is not steaming pissed! I’m sure the local Rural economy has noticed the drop in local income even as they read about record high natural gas prices due to the record cold winter. The GOP has certainly noticed even if the media and political polling companies have not.
Last month, Pennsylvania governor Tom Corbett, who is seeking reelection, sent a letter to Chesapeake’s CEO saying the company’s expense billing “defies logic” and called for the state Attorney General to open an investigation.
Tom was both Pro Fracking and a Tea Bagger last I checked but now he wants to investigate a Corporation ? Things have Come Undone when Tea Baggers think Corporations, Energy Corporations that create jobs need to be investigated./s
January 4, 2014
The companies that once operated the wells have all but vanished into the prairie, many seeking bankruptcy protection and unable to pay the cost of reclaiming the land they leased. Recent estimates have put the number of abandoned drilling operations in Wyoming at more than 1,200, and state officials said several thousand more might soon be orphaned by their operators.
The most quotable quote of ExxonMobil chief Rex Tillerson‘s talk last week at the Council on Foreign Relations was his lament that current ultra-low natural gas prices were having on oil and gas drillers. “What I can tell you is the cost to supply is not $2.50. We are all losing our shirts today. You know, we’re making no money. It’s all in the red.”
Shell is cutting back now and Chesapeake is scamming the people they bought drilling rights from to try and stay afloat funny I can’t find any recent numbers from Exxon’s CEO instead all I find are news reports that he is trying to block tracking in his back yard.