The following is a very provocative presentation by Matthew Simmons with Simmons International and a proponent of peak oil. He makes a very compelling fact based argument that oil and especially natural gas are about to explode higher.
Particularly compelling is his analysis of a sample Haynesville Shale gas well, which on day 1, yielded 18 bfc/day and on day 90 yielded 3.3 bfc/day. What this means is that all of the excess production that caused production to jump the last two years have come from shale gas production, which is actually expensive, and has very quick drop-off rates. With the amount of drilling plunging by the day, it won’t be long before we start to see it in the gas supply numbers. And the result could be for much, much higher natural gas prices than we have right now.
Check out the whole presentation:
I’m bullish on oil and natural gas over the next 5 years or so, but I didn’t find that presentation overly convincing, mainly because Simmons didn’t seem to have an explanation for the huge drops in oil and natural gas last year.
I thought he did. Demand fell off a cliff.
Look at slide 33 again.
Hey Aaron – Saw your MCF writeup today. Welcome to the Ken Peak appreciation society! Ping me if you want to talk natgas.