Oil & Gas News

Gas Producer Rushes to “Open the Taps” As Freeze Grips U.S.


By: Rachel Adams-Heard – Bloomberg – Chris Bird first saw the rumors of soaring gas prices Friday morning on Twitter. Physical natural gas prices were soaring in Oklahoma amid a cold blast that was gripping much of the U.S. and only stood to get worse. Bird, owner of a small gas producer in Tulsa, called one trader who confirmed the heating fuel was going for a staggering $350 per million British thermal units. Then he called another who said it had risen to $395.

That’s all Bird needed to know. He and his production technician grabbed some winter clothes at the dollar store and drove the stretch of highway to Osage County some 20 miles north. They met up with a buddy who owns a propane torch and began melting ice off idled gas wells to get them back online.

“We’ve got four of us in the office turning on every single gas well that we’ve got,” Bird said. “We have old wells that haven’t produced in 10 years, and we’re like, ‘open the taps, let’s go.’”

After years of depressed prices and weak margins, U.S. natural gas producers — at least those with wells and equipment that aren’t frozen — are cashing in on an unusually extreme blast of cold. The freeze is giving a rare boost to a market that’s never recovered from a crash more than a decade ago, flooded by cheap supplies from shale fields.

Prices have surged more than 4,000% in two days in Oklahoma, while gas processing plants across Texas are shutting as liquids freeze inside pipes, disrupting output just as demand for the heating fuel jumps.


The Arctic blast that’s unleashed deadly ice storms as far south as Houston is also disrupting oil output in the Permian Basin of West Texas, potentially impacting several hundred barrels a day of oil output, and has sent electricity prices surging.

As much as 6 inches (15 centimeters) of snow could fall in Fort Worth, Texas, over the weekend, with temperatures possibly plunging into the single digits Fahrenheit on Monday. Freezing rain has already created treacherous driving conditions there, with a 130-vehicle pileup on Thursday leaving six dead and dozens injured.

Texas’s top energy regulator adopted emergency measures to ensure households, hospitals, and churches get first dibs on gas for furnaces as the coldest weather in decades descends on the Lone Star state.

Electricity prices in northern Texas averaged more than $300 a megawatt-hour Friday afternoon, compared with an average of about $18 so far this month, according to grid data compiled by Bloomberg.

Texas facilities operated by pipeline companies DCP Midstream LP and Targa Resources Corp. were reported shut on Thursday due to the cold, while Enbridge Inc. said it was limiting requests to transport gas on a pipeline stretching from Texas to New Jersey. Gas production in the mid-continent region is down 35% from the 30-day average, BloombergNEF said Friday.

Meanwhile, Bird estimated that his company will bring in $600,000 to $700,000 a day for as long as gas prices in Oklahoma remain at these levels — up from just a few thousand dollars a day normally. That’s enough to make conventional wells drilled years ago, and all but forgotten, profitable again. “We’ve got a roustabout crew hooking up wells that are so old they were disconnected,” he said.

His company, Exponent Energy, owns a few hundred wells in Osage County, though these aren’t the gushers out in West Texas. Three-quarters of them had been shut because they no longer made any money at recent prices.

On Friday, that changed.

“We’ve got every single person who works for us in the field turning on wells,” he said.

A weekend of crazy prices could pay for a purchase he made three and a half years ago. By the time he and his team were sipping celebratory margaritas, prices had climbed even higher — soaring above $500 per million British thermal units.

“We’re paying off 10% of the acquisition value of the deal every day — today, tomorrow, Sunday, and probably Monday,” he said on Friday. “In three to four days, we’re going to pay off the value of the asset from when we bought it.”

To Top
Lease or Sell Your Minerals Rights in Oklahoma or Texas ➡️(405) 492-6277

Have your oil & gas questions answered by industry experts.