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![](/profile/get-photo.asp?memberid=15862&type=profile&rnd=376) NW Louisiana | Like a few have said on here, the drilling rigs are just drilling the holes, so the amount of new wells will decline with the rig count. You probably won't see a drastic decline in production for some time. The larger companies are able to scale back and focus on areas that are cost effective. However, there are a lot of smaller companies that have all of there assets in one or two plays. These guys have to keep flowing to keep cash coming in. We are in the middle of the Haynesville Shale, and there has been an enormous pull back in drilling in this area, but there are a few players still sticking holes in the ground. They have made a ton of changes to how they drill and are a lot pickier where they are drilling. I don't think they are turning a profit at today's prices, but they have to produce gas. I believe I am correct in saying that these companies all have contracts with the pipelines where they have a minimum amount of gas that has to flow into the system. They pay for their alotment whether they are flowing gas or not, so this might be a reason not to shut in everything. I would assume this applies to crude as well.
Don't mean to steal this post but does anyone have any clue to how proactive oil and as companies are with hedging their production? | |
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