While Oil Patch Bleeds, Gas Drillers Race to Unleash Wells
- Backlog of unused wells in Northeast plunges and output soars
- Price gains, new pipes have gas drillers letting wells loose
The Asia Vision LNG carrier ship sits docked at the Cheniere Energy Inc. terminal in this aerial photograph taken over Sabine Pass, Texas, U.S., on Wednesday, Feb. 24, 2016. Cheniere said in a statement last month. Cheniere Energy Inc. expects to ship the first cargo of liquefied natural gas on Wednesday to Brazil with another tanker to be loaded a few days later, marking the historic start of U.S. shale exports and sending its shares up the most in more than a month.
Photographer: Lindsey Janies/BloombergOil prices have been lousy for so long that U.S. producers are hoarding unfinished wells rather than pumping crude out of them. In the natural gas patch, just the opposite is happening.
While the energy slump has idled lots of wells for both commodities, their economics have diverged. Oil remains at half its price in 2014, leading to a record backlog of drilled-but-uncompleted wells spread across shale formations where fracking brought on a surge in crude production. Meanwhile, gas futures are almost double last year’s low, and the so-called fracklog of wells in the Marcellus gas fields of Pennsylvania and West Virginia is shrinking as drillers there unleash supplies to take advantage of higher prices.