Regional producers told the Midland Reporter Telegram that natural gas prices at the Waha hub near Coyanosa have fallen to as low as $0.00. Bill Graham of Incline Energy told the Reporter Telegram last month the Waha plant “has so much gas available that it outruns their delivery capacity. With the supply outrunning their demand, they can reduce their pricing and have done so drastically… Now the posting for April 2019 is $0.00 or absolutely nothing.”
Apache Corp. said it began deferring natural gas production from its Alpine High play in March because of the extremely low prices at Waha. The deferrals represent about 250 million cubic feet per day of gross gas production.
Greg Haas of Houston-based Stratas Advisors, which monitors natural gas prices, added, “The growth in associated natural gas production that is coming out of the Permian region with the great volumes of crude oil has outpaced the growth in natural gas takeaway pipeline infrastructure needed to take the regional gas to viable natural gas markets. So takeaway capacity is at a premium, which means natural gas prices in the Permian as under unprecedented pressure.”