Companies Cut Drilling as Natural Gas Prices Continue Dropping
“It is safe to say that there will be fewer natural gas wells drilled in 2012,” said Kathryn Klaber, president of the Marcellus Shale Coalition, an industry group based in Pennsylvania.
In recent weeks, several companies have announced plans to cut gas production around the nation, but experts say the low prices are also opening up new markets.
When the shale drilling boom was starting in 2008 the average price for a unit of gas was about $8. Two years ago it was down to $5.50, and now it’s dropped to about $2.50. Part of the reason is that the shale gas formations became productive more rapidly than expected, as thousands of new wells have been drilled nationwide.
Industry reports note that the national count of active new gas drilling rigs fell to 775 in early February, down from about 1,500 in 2008.