Development of the nation’s shale natural gas plays may be a thankless job for producers today, but its value will pay off in the years to come, according to the CEO of Chief Oil & Gas LLC, who hopes to expand his company’s presence in the Marcellus and Utica shales.

“If you’re like me, you’ve been waiting for someone to thank you for all that you’ve done to find and develop such a huge new supply of energy that all citizens in our country can use to reduce their cost of energy, enjoy a better standard of living and a way of life,” Trevor Rees-Jones told attendees of Hart Energy’s DUG East Conference in Pittsburgh. “And, if you’re like me, no one has come up to thank you yet. Well, I’m your man. I’m here to thank you on behalf of every citizen and consumer in the United States.”

The CEO conceded that the abundant supply of natural gas caused prices to fall to record lows, adding “some of you may prefer the word ‘collapse.’ [It’s] not so good for us producers, but the point is it’s good and very beneficial for the average American — the consumer. The cost of energy comes down for everyone and in many ways people don’t realize…not just fuel cost, but also the cost of food and many consumer goods that are made using natural gas. So there is a very direct and substantial benefit to the American consumer from this shale revolution.”

Annual U.S. Henry Hub prices have slumped since 2008 as the surge in dry gas production in the Lower 48 has closed the gap between production and U.S. consumption. In 2011, U.S. consumption outpaced domestic dry gas production by just 3.5 Bcf/d, its lowest level over the last 10 years. However, the Energy Information Administration projects that difference will end up coming in at 4.4 Bcf/d in 2012 and 3.9 Bcf/d in 2013, and forecasts that the Henry Hub will average $3.59/MMBtu in 2013, up from $2.85/MMBtu in 2012.

Futures traders expect the upward price momentum for U.S. natural gas to continue beyond 2013. On Nov. 13, the 2014 Nymex natural gas futures strip settled at a rounded price of $4.24, with the subsequent three years averaging $4.38, $4.56 and $4.77, respectively.

Rees-Jones also spent time lauding the environmental benefits of natural gas. “It would wonderful if we could secure all, or even most, or even a good bit of, our energy needs from renewable sources such as wind or solar. But the fact of the matter is we can’t. And unless you want to turn in your car keys, turn off your heater in the winter and air conditioner in the summer, and turn off your lights at home and at work, every single person in the United States needs this resource base.”

Chief currently holds 125,000 acres in northeastern Pennsylvania’s in Bradford, Susquehanna, northern Sullivan and northern Wyoming counties, “an area that if you have to be in dry gas, many believe is the best place in the country to be.” Rees-Jones added that Chief’s wells in the area were currently flowing at around 20 MMcf/d, with 3,100 pounds of pressure. We’re currently running two rigs and we would love to expand our position further in the Marcellus, whether in the dry gas area in northeast Pennsylvania or elsewhere in the Marcellus,” Rees-Jones said. “Two of our goals are to increase our presence and position in the Marcellus and also to establish a position in the Utica.”

Chief has been selling some of its assets in the Marcellus for the last three years. Penn Virginia Resource Partners LP bought Chief’s gathering system unit in April for $1 billion (see NGI, April 16). Chevron Corp. and EXCO Resources Inc. bought acreage from Chief in 2011 and 2010, respectively (see NGI, May 9, 2011).

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