Boosted by strengthening prices, executives at Oklahoma natural gas producers have used a more optimistic tone in recent days as they describe their primary product.
“The recent uplift in natural gas prices could have a significant impact on our financial results in upcoming quarters,” Devon Energy Corp. CEO John Richels said during a conference call with analysts Wednesday.
Chesapeake Energy Corp. acting CEO Steve Dixon had a similar message.
“Natural gas markets have improved materially in the last few months, and signs of long-term demand growth are beginning to materialize across multiple market segments,” Dixon said in an analyst conference call Wednesday.
Tulsa-based WPX Energy Inc. has seen a similar trend.
“On the gas front, we're encouraged by the stronger prices that started late in the quarter,” WPX CEO Ralph A. Hill said Thursday.
After bottoming out at $1.90 per thousand cubic feet in April 2012, natural gas prices have steadily increased over the past year, reaching $4.32 Wednesday, up 134 percent.
The price slipped 6.5 percent Thursday to settle at $4.04.
While natural gas prices tumbled in recent years, the price of oil soared, leading energy companies to switch as quickly as possible to a focus on crude.
Executives are watching the market closely, still not willing to jump back to natural gas.
Chesapeake this week said it now expects to produce about 2 percent more natural gas in 2013 than previously announced, largely because of strong production from its Pennsylvania gas wells.
The company's drilling budget, however, remains focused on oil.
Both Chesapeake and Devon said they're not yet ready to direct more money to natural gas projects.
“While the improved sentiment around natural gas prices is certainly encouraging, we're not modifying our 2013 capital plans at this time,” Richels said.
“Even with our natural gas assets being located across some of the lowest-cost shale plays in North America, returns continue to be more attractive on the oil and liquids rich side of our portfolio verses dry gas drilling,” Richels said.
Besides boosting earnings, stronger natural gas prices also could help Chesapeake receive more for its planned asset sales, Dixon said.
“Clearly, with the movement in the market, it's been a signal for buyers out there, and we're getting a lot of interest from a large set of buyers,” he said.
Chesapeake has announced the sale of about $2 billion in assets so far this year and has said it plans to sell a total of $4 billion to $7 billion by the end of the year.