Natural-gas prices will remain low for the rest of the year because so much of the fuel is being produced in the quest for more-valuable crude oil and petroleum liquids, Pioneer Natural Resources Co. Chief Executive Officer Scott Sheffield said.
Pioneer, the most active driller in Texas’ Permian Basin, will produce 1.4 billion cubic feet of so-called “associated gas” a day within a few years just from the four U.S. shale plays where it is drilling for oil, Sheffield said in an interview at Hart Energy’s Developing Unconventional Gas Conference in Fort Worth, Texas.
The amount of associated gas produced industry-wide is “a big unknown,” he said.
“I’m pretty confident based on the current rig count, the oil rig count climbing, that there’ll be plenty of gas coming out of the liquids-rich plays over the next five years,” Sheffield said.
There are probably fewer drilling rigs exploring in pure or “dry” gas fields than the U.S. rig count indicates, Sheffield said. In Texas, some rigs that are drilling for oil and liquids are classified as gas rigs because state rules allow operators to hold more acreage with a gas well, Sheffield said.
That may make it difficult for producers to slow down gas production, he said.
“There’s not a lot of dry gas rigs left to drop, maybe a couple hundred,” he said.
Gas has fallen as low as $1.907 per million British thermal units this year from a high of $3.096 on Jan. 4.