- 35628, 649, Petro-Hunt, Zabolotny 144-98-3B-10-2H, Little Knife, t7/19; cum 38K 8/19;
- 33592, 247, BR, Anderson Ranch 1E MBH, Camel Butte, t7/19; cum --;
- 35312, 1,443, CLR, Putnam 8-25H1, East Fork, t5/19; cum 37K 8/19;
- 34825, 988, Nine Point Energy, Eckert Foundation 152-102-22-15-13H, Elk, t4/19; cum 116K 8/19;
RBN Energy: is the Permian natural gas price real?
After months of severe natural gas pipeline constraints, Permian producers and shippers are reveling in the relief of new takeaway capacity. Kinder Morgan’s Gulf Coast Express (GCX) Pipeline, which began flowing initial volumes in mid-August, last week began full commercial service on its 2-Bcf/d greenfield route from the Permian to South Texas. Actual volumes on GCX are hard to come by, but all indications are that flows are ramping to near capacity. That surge in Permian outflows in recent weeks has propelled natural gas prices at the regional benchmark Waha Hub — which traded as low as $5.00/MMBtu below zero earlier this year and fell into negative territory as recently as August 8 — to nearly $2/MMBtu, levels not seen at the hub since last winter. However, with the sting from negative prices only now just fading, many in the market are wondering if this rally is here to stay or just a temporary reprieve. Today, we look at the latest developments in the Permian natural gas market.
Permian gas prices have been fun to follow, if not trade, this year, and have provided the fodder for many an RBN blog of late. With GCX entering full service, it looks like prices have really turned the corner, at least for a little while. As an intrastate pipeline — entirely situated within Texas state lines — GCX isn’t required to post daily flow data like federally regulated interstate pipelines do. But comments from the company suggest the pipe was flowing close to 1 Bcf/d a couple of weeks ago, and industry chatter since then suggests that it has continued to ramp up and is perhaps now close to its capacity of 2 Bcf/d. Kinder Morgan also confirmed on September 24 that the pipeline is now fully operational. The incremental takeaway capacity from GCX has almost instantaneously eased what had become crippling transportation constraints for moving gas supply out of the Permian. That, in turn, has allowed regional gas prices to soar, at least on a relative basis compared to where they were in the summer, providing much-needed relief to Permian producers and their likely exhausted gas marketers.