What does this runaway inflation do to the value of minerals. If a mineral value evaluation was done in 2019 what percentage of real value has been lost with this run away inflation and the spending power of the dollar shrinking?
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A shrinking dollar drives up the price of oil. Inflation bad=Producing minerals good.
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In theory TODD_M_Baker is correct, since oil is denominated in US dollars internationally, but more importantly are the rules of supply and demand, so if there is a recession while production is ramping up, there will be the worst scenario — declining prices and a cheapened dollar.
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The Henry Hub price for an mcf of gas was around $2.40 in June, 2019. In January 2022 it was around $4.35, an 81% increase from 2019. All else being equal, the price of gas should make your minerals worth more today than in 2019.
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Good point from James, if production remained constant. It could be higher or lower depending on the normal production decline, new field development and engineering problems.
Thank you James for your input
February 22 NG closed at $6.25. That helps too.
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