I'm not sure this makes any sense, lol.
Welcome to the world of O&G Exploration.
NOTHING they do ever makes sense. Short of airlines - I don’t know a more screwed up business. They both know 2 phases - boom or bankruptcy.
These companies are handing out bonus checks one week and pink slips the next.
Part of the flooding of the market was their own short sightedness last time in the SCOOP. They saw $80-120 oil - and can make money drilling for anything North of $40 - so they went hard - of course anyone with half a brain and a 8th grade science class under their belt knows when you drill for oil in North Texas and Oklahoma - your also going to hit natural gas. Guess what - you can’t just shove that gas back in the ground after you pump it out - so you’ve got to either store it - or sell it and too much of anything hitting the market kills prices.
In the Utica - they are working on storage caverns to help ease some of the oversupply- as well as finding a market for all the methane and waste gas locally building small scale power plants. That stuff is too corrosive to send long distance via pipeline a bit burn it locally and produce power is economical (to bad they couldn’t figure this out 35 years ago and convert all the aluminum plants and steel mills to mini arc furnaces - could have really saved some jobs).
The big move of course will be as we create more LNG plants and have ability to pipe this stuff over to Baltimore and down to Virginia/SC ports to send overseas. Just like Korea and China did with their steel - we can dump on Europe and other markets our low price gas and control the markets.
I was told anytime nat gas is above $2 - Gulfport can be profitable locally and the goal is to get that to 1.50. I don’t know - seems like a pretty tough target to meet - but they seem sure of themselves.
