Does anyone have any idea what the price of natural gas has to be before the gas company drilling the well?

and pumping the gas is making money?

I know the wellhead price has to be at a certain level otherwise the gas company is losing money

One Response to “Does anyone have any idea what the price of natural gas has to be before the gas company drilling the well?”

  1. Jerry Says:

    This is a complex question. Some of the variables include:

    Company’s cost of capital
    country and tax structure
    Is the well onshore, offshore, shale?
    What are the company’s hedges?
    Well owned 100% or partial?
    Land owned or leased?
    Proximity to pipelines

    In the US, companies sometimes drill unprofitable wells because they would otherwise have to return leased land to the government.

    I follow Noble Energy (NBL) which is solidly profitable. In the 4th quarter, their realized price for natural gas was $3.57 per mcf in the US. They did not specify costs.