Adjusted for inflation, the natural gas spot price dropped to its lowest point in the shale revolution era. Fracking and horizontal drilling revolutionized the industry a decade ago, but the success has also cost producers with now record low prices hitting $1.77/million BTU today.
The lowest price was $1.67/MMBtu on March 4, 2016 which would be about $1.80/MMBtu today based on the U.S. Bureau of Labor Statistics inflation calculator.
The spot price for natural gas has made a steep decline since its most recent peak in December, 2018 at $4.61/MMBtu. The fall has pushed three Wyoming natural gas producers, all located in Sublette County, to change their plans.
Ultra Petroleum, the state’s largest natural gas producer, announced in September it would suspend operations through the year year. Pinedale Energy Partners has suspended drilling. Jonah Energy is spending less money and plans to slow down production. Those three companies alone account for 54 percent of Wyoming’s natural gas, according to Jonah Energy. Additionally, Southland Royalty Company, the 15th largest natural gas producer, filed for bankruptcy on January 27.
“The production declines are going to continue, and they’re going to accelerate in areas. That will result in loss of tax revenue, loss of jobs, and really put Wyoming in a precarious situation,” Paul Ulrich with Jonah Energy said.
Natural Gas Intel reported from the North American Prospects Expo that energy executives were not optimistic about prices increasing in the near-term.
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