"We needed a really dreadful (price) event to stop people from drilling gas wells and bring some balance to the supply and demand." While producers highlighted their liquids-rich profiles, natural gas prices were also addressed at OGIS New York-directly at times but mostly indirectly, as if "gas" is the "Voldemort" of the industry as "he who must not be named" is in the Harry Potter stories. John Walker, chairman and chief executive of EV Energy Partners LP and a contrarian buyer of gassy properties and production in the past few years, said, "For the first time since 2007, I'm turning a little bit positive about natural gas (dynamics)... "We needed a really dreadful (price) event to stop people from drilling gas wells and bring some balance to the supply and demand." Walker addressed some of the more than 1,600 registered attendees at the IPAA's 18th annual oil and gas investment symposium last week. The company's production is hedged at higher-than-current gas prices through 2014, "so we're okay through then." He still seeks to add gas-as well as oil-properties to EV's portfolio, he added. "All we're looking for is a good PV (present value). Rate of return is what drives us." Tim Benton, GMX Resources Inc. executive vice president, geosciences, said of the Haynesville dry-gas play, "When you're selling gas at $2 an Mcf, it's hard to be excited about anything." Leaseholders in the northwestern Louisiana gas field have now mostly secured their positions by 640-acre sections-some of it leased for as much $25,000 an acre in late 2007 and early 2008 when gas prices were more than $10 an Mcf-and are laying down rigs rapidly. However, GMX has acreage over and production from the oily Bakken, Sanish and Three Forks in North Dakota, as well as leasehold over the oily Niobrara in the Rockies. And, it is focusing its efforts there. Tony Best, SM Energy Co. president and CEO, noted, "We're completing our last Haynesville well at this time." All of its acreage there is now held by production. New wells are possible when gas prices improve. Gary Evans, Magnum Hunter Resources Corp. chairman and CEO, said the company is also reducing its gas-directed drilling. "We're trying to do our part." -Nissa Darbonne, Editor-at-Large, Oil and Gas Investor, OilandGasInvestor.com, Oil and Gas Investor This Week, A&D Watch, A-Dcenter.com, UGcenter.com. Contact Nissa at firstname.lastname@example.org.
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