| HOUSTON, April 11
HOUSTON, April 11 The winter rally in natural
gas prices is creating cautious optimism among companies like
Matador Resources Co and Swift Energy Co,
smaller energy producers that see opportunity and future deals
in a once-moribund market.
Consumers pulled a record amount of gas from storage this
freezing winter, leaving stockpiles at the lowest level since
2003. This has spurred expectations for higher prices.
"Gas isn't a bad word today," Bruce Vincent, president of
Swift Energy Co told the OGIS conference of energy
investors and companies in New York earlier this week. He added
that returns for Swift's Eagle Ford gas have improved but more
pipeline is needed to carry the gas to Gulf Coast markets.
Swift is also seeking a strategic partner for its Fasken
Field gas project near the Rio Grande River in far south Texas,
with an announcement on the deal expected midyear, Vincent said.
Houston-based Swift is eyeing the Mexican export market for
its south Texas gas as that country finalizes its energy
reforms, said Vincent.
Sentiment about drilling for dry gas, or gas that does not
have a high content of more valuable liquids, is also improving
in places like the Haynesville in north Louisiana and the
Barnett Shale in north Texas.
Gas prices in the Haynesville have improved dramatically and
"the will be increased activity there," Joe Foran, chairman and
founder of Matador Resources told the OGIS conference held in
Analysts have boosted 2014 price forecasts for gas at Henry
Hub, the benchmark U.S. supply point in Louisiana, to an average
of $4.59 per million British thermal units, up about 5 percent
over their previous $4.37 forecast in February.
Dallas-based Matador plans to spend about 3 percent of its
budget in the Haynesville Shale, but that share is likely to
grow to 6 percent or more over time, said Foran.
Its 2014 plan does not include any Matador-operated wells,
but the company may benefit from Chesapeake Energy's plans to
add rigs in the Haynesville this year, said Foran.
In 2008, Matador sold drilling rights in about 9,000 acres
to Chesapeake for $180 million, but Matador retained an interest
and royalty rights on those properties.
Quiksilver Resources Inc, which resumed drilling in
the Barnett Shale in the third quarter of 2013, told investors
that its partnership with Tokyo Gas is thriving and hinted at
increased investment by the Japanese natural gas supplier.
Last year, Quicksilver sold a 25 percent stake in its
Barnett Shale assets to a unit of Tokyo Gas for $485 million
"I think there's more to come with Tokyo Gas," John Regan,
Quicksilver's chief financial officer told OGIS.
(Reporting by Anna Driver; editing by Terry Wade and David