Chesapeake CEO: Dramatic Natural Gas Price Rebound Expected

Current low natural gas prices are setting the stage for a dramatic price rebound that should begin this fall or winter, Chesapeake Energy Corp.’s chief executive officer told analysts Tuesday.

“Today’s gas prices are clearly not strong enough to support a North American rig count that is high enough to prevent a very severe and unprecedented decline in North American gas production,” Aubrey K. McClendon said.

“This will set the stage for a dramatic reversal of natural gas prices sometime this fall or winter,” he said.

“How high will gas prices go in the recovery and rebound phase in the next cycle? Obviously, we don’t know. But clearly, gas prices were too high one year ago at $12 to $13 per thousand cubic feet, and today they are far too low at $3.50 per thousand cubic feet,” he said. “So my guess is the rebound will overshoot on the high side, just as it has overshot on the low side.”

McClendon said if there is a surprise, it likely will be that natural gas prices rebound sooner rather than later.

Rigzone