Oil bust could spur natural gas turnaround in San Juan Basin

  • If Merrion and key industry analysts are correct, there might be a silver lining in the oil crash caused by the coronavirus pandemic — it could end up helping northwestern New Mexico natural gas producers and even give a lift to state revenue in a time of crisis.
  • The potential upside: The drop in natural gas production is bound to reduce the global supply of gas and it could lead to shortages, which would drive up prices and allow companies in the San Juan Basin to increase their production, said Daniel Fine, a longtime energy analyst and oil and gas researcher with New Mexico Tech.
  • New Mexico's Oil Conservation Division, which regulates oil and gas production in the state, said it sees no signs of increased natural gas activity at the moment, and added there are currently zero active drilling rigs operating in the northwestern part of the state.

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