RE: robbie - the cost of horizontal drillingGood post and digression.
We forget one main point though. What ever the spot price is, if they don't sell it....they make nothing! So, while they are making a few pennies per nat gas unit, it is better than $0.
Here in lies the fundamental supply and demand imbalance we are currently experiencing. The weak have to be shaken out and declare bankruptcy or something....because otherwise, they will need to sell their nat gas in the market. This scenario is further exacerbated when storage is full........at least now, they can produce it and store it until they get a better price for it. But when its full.....it's gonna be flooded out in the market. And while they will not be making money from it, they will at least get something for it. At this point, it won't be about maximing profit, but rather, minimizing negative profits.
That's why some nat gas pundits have stipulated that there needs to be quite a few bankruptcies declared in the industry so that this supply and demand imbalance can naturally take its course.