EQT - Chesapeake Plays The Role Of OPEC Will It Be Enough For Natural Gas?
2024-02-22 17:44:06 ET
Summary
- Chesapeake Energy Corporation is playing the role of OPEC with its capex reduction and production curtailment announcement.
- Chesapeake is, however, building up TILs giving it optionality to increase production when natural gas prices recover.
- At the moment, the U.S. gas market is still oversupplied by ~1 Bcf/d. Lower production is needed in order to balance the market further.
- At current STRIP, we expect Lower 48 gas production to average ~102 Bcf/d, which should reduce the potential injections we see coming.
- Natural gas prices, however, will remain range bound.
Note : This article was first published to subscribers yesterday.
If you are staring at your screen wondering why natural gas prices are up ~11%, then look no further. Chesapeake Energy Corporation (CHK) announced a major reduction in capex and production (0.73 Bcf/d 2024 average vs. Q4 2023). And in turn, every natural gas producer we follow is up… a lot....
Chesapeake Plays The Role Of OPEC, Will It Be Enough For Natural Gas?