While Texans are struggling to keep the lights and the heating on, gas producers in the Lone Star state, or at least those whose wellheads did not freeze, are having a blast.
The wave of Arctic weather that hit the United States this week led to an explosion in the price of natural gas as heating demand shot up. Supply, however, could not keep up, not least because un-winterized wells in Texas froze, tightening production.
This prompted some companies to de-idle wells in Oklahoma and others to boast they'd hit the jackpot.
"We've got four of us in the office turning on every single gas well that we've got," said the owner of a small gas production company in Oklahoma, as quoted by Bloomberg this week. "We have old wells that haven't produced in 10 years, and we're like, 'open the taps, let's go.'”
"Obviously, this week is like hitting the jackpot," said the president of Comstock Resources at a conference call this week.
Comstock, owned by billionaire Jerry Jones, is a shale oil and gas producer, and it had started ramping up production even before the polar vortex sent several states reeling from unusually low temperatures.
These temperatures pushed gas prices from single-digit territory well into the three digits: in Oklahoma, gas prices hit $600 per million British thermal units during last weekend. By Wednesday, prices on the spot market had soared above $1,000 per mmBtu in Oklahoma, to a high of $1,250.
Just a week ago, spot prices hovered around $9 per mmBtu.
According to Comstock, this week, it sold gas at prices ranging from $15 per thousand cubic feet to as much as $179 per thousand cubic feet, according to an NPR report citing the conference call. This compares with an average of $2.40 per thousand cubic feet during last quarter.
By Charles Kennedy for Oilprice.com
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