The relatively low natural gas price sends a signal to at least one driller to cut back on the supply. If others join this move the market prices could increase and affect electricity pricing.
Analysts back Cabot plan to cut natural gas drilling by $100 million
Houston (Platts)
Energy industry analysts Wednesday applauded a decision by Appalachian producer Cabot Oil and Gas to reduce by $100 million its projected 2012 capital spending for natural gas drilling, primarily in the Marcellus Shale play.
In a conference call Tuesday announcing the company’s fourth-quarter and full-year 2011 results, officials said that the producer would lower its 2012 capital expenditures 15% to 20% in response to the low commodity price environment for natural gas.
As a result, the producer also reduced its production growth estimate for the year to 35% to 50%, down from a previous 45% to 55%. …