Plummeting temperatures this winter have led to unexpected benefits for Oklahoma natural gas producers.
“Higher prices will give us the the additional capital to continue drilling,” producer Pete Brown said. “The more money we have, the more we spend on drilling new wells. We have four or five areas where we’re looking at drilling vertically.”
Brown is co-owner of Oklahoma City-based Cimarron Production Co. and Kingfisher-based operator Brown and Borelli Inc. Brown and his companies focus on conventional, vertical wells.
The price of natural gas slipped 1.4 percent Thursday to close at $6.06 per thousand cubic feet. The day before, the fuel closed at $6.15, its highest level since December 2008.
The recent surge has been fueled by a colder-than-normal winter, especially along the East Coast. Prices are expected to retreat in the coming months, but Brown said producers hope they don’t fall too far.
“I think this price over $6 might be a little optimistic to think it will stay at this level, but it will keep at a level strong enough for us to drill,” Brown said. “I’m not sure the price will drop back below $4 again.”
While companies have scrambled in recent years to recover higher-priced oil, the state typically produces far more natural gas than oil.
“Normally the mix in revenues was two-third natural gas and one-third oil. Recently that has flipped,” Brown said. “That has a profound effect on the state of Oklahoma. There will be quite a bit more coming in.”