Investors, our company’s success has come from oil sales, and selling oil producing leases after ‘booking oil reserves’…
We have purchased leases with gas, and sold gas, but for many reasons the profits and uses of natural gas plus certain difficulties like the supply vs. demand chain associated with low price, and its transportation, etc., don’t compare at the present time to oil profits for private investors.
There can be compression problems, or storage problems with natural gas, as it must be used when produced in most cases; unless adequate storage is available as in ‘salt dome storage caverns’. Mostly though, natural gas prices are still too low to make a decent profit relative to oil prices when you factor in the typical development costs, and drilling & completion expenses to bring-on natural gas wells, etc.
Refineries, gathering systems, hubs, and ‘sale delays’ to the end user make natural gas sales & production delivery problematic…or this has been my experience since starting my career with Merrill Lynch in 1983. I’ve seen refineries not take low BTU gas, sour gas, or gas with high concentrations of H2S gas. I’ve seen deep discounts attributed to over supply/demand of natural gas, and even low pressure going into the pipelines. This has and does require compressors to raise the pressure from a lease field to the ‘line pressure’ maintained by the pipeline companies having pipeline ‘monopolies’; or who can charge steep rates for moving gas. More infra-structure at the lease or field location is needed for gas production. I mean gathering systems, meters, and compressor installations.
Oil has no ‘identity tag’ around the world, and is used for over 10,000 purposes and therefore has a constant demand rather than just for its heating, or energy value.
We like oil.
Sincerely,
Dennis W. Stutes, CEO
Oil & Gas Technologies & Discoveries, Inc.
Hi-Tech Oil & Gas Discoveries, LLC, Manager
Tar Water Oil & Gas, LLC, TOG, Operator
408 975 0800 Cell: 805 701 7761
16 East 16th. Street
Ste. 401
Tulsa, Oklahoma 74119
www.oilandgasinvesting.com