My current insight and forecast from working in an anylist role oil for a major natural gas producer:
Drilling has been at a very low pace so far in 2007 due to low natural gas commodity prices and a large volume of gas in storage faucilities. We do not predict doing a lot more drilling through the balance of the year either. This holds true for most other oil & gas drilling companies in Alberta. There are current pending court battles in regards to the ownership of the natural resources in regards to coal bed methane, the true new fontier in natural gas development. By Q1 of 2008 there will be better clarity around who owns these resources and can exploit them. I am forecasting that as the reserves of gas in storage are depleted and the clarity around resourse ownership are clarified that drilling is going to once again ramp up in Q1 2008 and continue seamless into 2009. The price of natual gas currently is $7.81 USD/MMbtu. I predict that this will climb over $10 in the next 18-24 months. This of course will cause our prices of natural gas delivery to our homes to increase. Locking in may not be a bad idea right now.
- I should add that this is a forward-looking statement and you cannot hold me to any of this if prices drop and you lock in
