Mineral and Royalty Interest – Storage Deficit Decreasing


With the storage deficit decreasing, natural gas prices have dipped back again to the $3.50/Mcf realm. A bad sign for mineral and royalty interest owners as they await development on non-producing acreage. The cause has been a combination of coal-to-gas switching, milder weather forecasts for the East Coast, and demand loss as nuclear facilities came back online. The expectation remains that storage inventories will be back to the ~3.8-3.9 Tcf level, assuming that the market runs around 4 Bcf/d through the remainder of summer. Given the mild weather forecasts in the next few weeks, this seems plausible. Though there will undoubtedly be some pricing gyrations with possible tropical storms or hurricanes the expectation remains that gas prices will hover around $4/Mcf to spur enough reverse coal-to-gas switching and replenish storage inventories by the end of injection season. That said, easing infrastructure constraints should also support gas prices at the $4/Mcf level through 2014. Given the above, owners of minerals and royalties interest may wish to sell all or a portion of their minerals and royalties, to cash in on a portion of their value today, while waiting for production to begin sometime in the future.


No Warranty/General Disclaimer:
Coyote Minerals & Royalties does not warrant the accuracy, adequacy or completeness of the information and materials contained herein and expressly disclaims liability for any errors or omissions in the information and written material. No warranty of any kind, implied, express or statutory, is given in conjunction with the information and materials provided.  The data contained herein is for informational purposes only and is not represented to be error free.

Leave a Reply

Your email address will not be published. Required fields are marked *