The Marcellus Shale in the Pennsylvania area is one of the few areas in the country where producers are drilling wells searching only for natural gas. Throughout the rest of the oil patch, producers are searching for oil, although most such wells still produce large amounts of natural gas.
Say said he does not expect the recent price spikes to lead companies to refocus on natural gas anytime soon.
“People already have their budgets set for 2014,” he said.
“Oil is still the key player. Those numbers are very robust. There could be some new gas come on, maybe, but it's not going to be a significant number. People are not going to run out and make the same mistake they made in the past and bring on a ton of new gas so it tanks the market again.”
While companies have moved away from dry natural gas wells, natural gas still represents a large percentage of most Oklahoma producers' haul.
“It certainly helps with their gas prices,” Say said.
“February should be over $5 for Oklahoma gas, which is something we haven't seen in a long time. It's going to help their cash flow and that of the state. It's very positive for Oklahoma producers.”
CONTRIBUTING: The Associated Press
We've got record demand, record withdrawals from storage, and short-term production is threatened. It's a dangerous market right now.”