Replies to This Discussion

Permalink Reply by jim weyland on February 14, 2014 at 6:18

all of your points ring true.

each day, the wsj shows the 10 biggest movers, both up and down in the junk debt marketplace. i don't remember exactly the largest move up, but i think it was around 2% and the next biggest down move for that date was around the same, 2%.

most of the others that day were well under 1% movers. and, that's what made the size of the genesis move stand out to met.

for comparison purposes: in today's wsj the biggest up move was 3.25% by navistar. the largest down move was an entity called momentum at 2.63%

i'm sure genesis is a good outfit. the jeffe there is grant sims, he really knows his business.

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Permalink Reply by Paul M. Hernenko on February 14, 2014 at 6:18

Good observation and correct in this case. There are a number of people who definitely want to keep those lease terms reasonable and lease holdings easier to acquire. Bond movements mean much less than obvious infrastructure build out. Some people are not supposed to notice. 

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Permalink Reply by cocodrie man on February 14, 2014 at 0:59

I am told that a truck terminal is being built into this pipeline just off US 61 at Port Hudson.  I have noticed the construction traffic behind Port Hudson Baptist Church and near the Roadside Bar-B-Que stand.  I cannot see from the roadway what is actually being built because of the hill adjacent to US 61.  If indeed this information is correct what might that say about the purpose of the pipeline?  The fellow who pointed this out to me suggested it was under construction so that trucks could bring oil from wells in the area to the pipeline.  Perhaps this is but hopeful rumor, perhaps not. 

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Permalink Reply by James F. Jackson on February 14, 2014 at 2:54

Murphy Energy is building an oil facility on U.S. 61 in East Feliciana Parish.

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Permalink Reply by Joe Aldridge on February 14, 2014 at 4:52

CM,

That terminal is the propane terminal. The 4 large propane vessels on Leake Oil's lot are the ones that will be installed at that site. My guess is that they are going to separate the propane, etc from the gas and move it by truck. That's just a guess at this time on my part.

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Permalink Reply by Skip Peel - Mineral Consultant on February 14, 2014 at 8:16

Keep in mind that there wil be a lot of gas and NGLs coming from the Marcellus.

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Permalink Reply by jim weyland on February 14, 2014 at 8:52

skip, just one example of which is epd's 1230 mile ATEX purity ethane p/l running from the various marcellus area fractionators to their mt. belvieu facilities. jim

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Permalink Reply by Skip Peel - Mineral Consultant on February 14, 2014 at 9:19

jim, I'm not sure that's the one I noticed but I am seeing more articles about Marcellus gas and liquids coming south.  I was hoping that Haynesville production wouldn't see that competition.  More supply will only continue to depress prices in our market.  

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Permalink Reply by jim weyland on February 14, 2014 at 9:58

skip, when i got into the gas business, it was a pretty cosy business, a lot like the airline business was pre-dereg. you'd buy in the field (how i got started in the business) under 15 to 20 year contracts regulated by the FPC and later the FERC. the pipes then shipped it to market where they sold it to the utilities under long term sales agreements, also regulated by the feds.

so, back in the day, you pretty much competed on the basis of how good of golfing and skiing outings you put on and how good your hunting leases and fishing guides were because everything else was set in d.c.. oh, and let's not forget the quality and quantity of the stuff you'd pour in the evenings.

the shale has pretty much upset the applecart vis-a-vis putting gas into the pipe at the gulf coast, lets say, and moving it to let's say ny and n.england. now, there's plenty of gas in the market zones, most prominently, the marcellus.

so, now, the pipes have a whole lot of gas entering in the market zone leaving them with beaucoup surplus capacity in the lower two thirds of their systems.

what do you do if you're the pls? their answers seem to be: reverse the flow and ship the stuff to the gulf coast. a truism: gas like water reaches it's own level, just not as rapidly.

in a related note, some now surplus gas pl capacity running from the gc to the midwest markets is being repurposed to move northern oil back to the gc refineries.

jim

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Permalink Reply by Skip Peel - Mineral Consultant on February 14, 2014 at 13:37

I had a couple of friends that handled the golfing, hunting and liquid libations back in the 70s.  I didn't fare as well.  I ended up inspecting pipeline construction in Penn., W Va. and Ohio.  Much of it in the mountains in the winter for Texas Eastern.  Made me decide to go back to school.  LOL! 

The Marcellus is still in the "drill to retain leases" mode and will be for some time.  Lots of hydrocarbons looking for a market.

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Permalink Reply by jim weyland on February 14, 2014 at 14:39

skip, really, my first really good summer job was with ford, bacon & davis out of monroe. they had the construction management contract for the natural gas pl project known as the high island offshore system aka hios. part of that project included the first 42" gas pl laid offshore. 

 i started as a clerk on the beach. via radio, i'd take the daily reports from the various inspectors, get them summarized and pass a daily progress report( via a 2000 baud fax) to the mother ship, misc-wish pl, in detroit. at least once a week on average, i'd be shuttled out to the spread's barges via a bell 206 to take/deliver messages that they didn't want going out over the radio.

over time, i.e. the next summer, i worked my way up to being a de-facto diving inspector. what a sweet gig that was. the contractor's divers (back then the contractor was either b&r or j. ray) would do their thing. our divers would then jump to inspect. afterwards i'd take our lead diver's report and pass it back to the beach via radio. then, i'd go back to sleep.

now, of course, if our guys had an issue with the contractor's divers' work, this occurred rarely, i was supposed to 'make things so', that's why i was there. if and when this happened, it wasn't too difficult to get things corrected, the money was too large for either party to not find an acceptable resolution and quickly.

btw, tetco was/is a great outfit. the story of the big and little inch pls is a testament to american can-do.

back on topic, the gas business is very reactive to price stimuli, positive or negative. 

the thing of the gas marketplace, whether risk based a la the boom of the '70s or the shale business model of today, it is that it can't turn on a dime, kind of like a ultra large crude transport vessel cannot. 

jim

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Permalink Reply by Skip Peel - Mineral Consultant on February 14, 2014 at 14:59

If you can find it there is a good book on Texas Eastern. "From Texas To The East".  Can't get my copy back from my O&G attorney.

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