As the new year kicks off, HCS Energy Consulting is taking a quick “then and now” look at the changes in commodity prices from a year ago that will impact the E&P reserve report calculations and investor presentation narratives. A year ago, the 2017, the SEC base WTI oil price used in the reserve reports was $45.19 but the 5 year WTI oil strip on Jan 1, 2018 was $54.78 so we heard a lot of "the future is $10/BBL brighter than the past” stories. Natural gas was mostly ignored since the 5 year Nymex gas strip of $2.84 was only $0.06 lower than the $2.90 SEC price. Fast forward to a year later; now the 2018 SEC base reserve report prices are higher than the 5 year strips for both oil and gas. Though the 2018 SEC WTI oil price has increased by over $10.00 in the past year to $55.54, the 5 year strip price on Jan 4, 2019 was $51.91 which is $3.63 lower so we expect the oil narrative to change. This year, we also think natural gas will be a bigger part of the discussion since the SEC gas price rose to $2.96 for 2018 which is $0.27 higher than the Jan 4, 2019 5 year Nymex strip of $2.69. The 2 year cycle flip flop has happened before and I am sure we will see it again. How can we help you strategically plan for changing commodity prices ?
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