Verona, Wisc. — Natural gas prices are expected to fall below $3.00/mmBtu in early 2013 as improved drilling rig efficiencies, lower operating costs, high production yields, and new pipeline infrastructure keep production on the rise, according to Energy Solutions Inc., a provider and publisher of information on natural gas and prices. Energy Solutions reports that producers are unlikely to significantly curtail drilling efforts in 2013 because of high rates of return and the race to reach new markets, particularly in the Northeast. The use of horizontal drilling technologies in massive shale plays has caused overall operating expenses to decline. Since 2007, the number of days to drill a well has been cut in half, while the number of wells a single drilling rig can drill each year has doubled. Additionally, producers can supplement their natural gas revenues through the sale of natural gas liquids and the production of associated gas, improving overall profitability. By 2014, however, natural gas production growth does show signs of slowing. Meanwhile, the abundance of natural gas supplies puts the U.S. on a path to become an exporter of liquefied natural gas (LNG) in the near future.
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