Replies to This Discussion

Permalink Reply by Eric Covington on March 26, 2010 at 3:48

Yeah Jay, it does. Good hedging strategies kept the companies activities up this last year, but it will be interesting to see how big of a hit they take with future hedging contracts at our current prices.

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Permalink Reply by ken hatcher on March 26, 2010 at 5:09

You can bet the price of poker is going way up on future hedging prices. No quick fix here.

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Permalink Reply by adubu on March 26, 2010 at 9:43

spot drop to $1.80 in Sept. 09 on henry hub futures we will most likely see that again and if so rigs will lay down again then prices may firm up unless the excess LNG get dumped in USA which is projeced to increase for 2010. The world is flooded with gas. Funny Australian gas brought up with contracts to sell to Japan,etc The USA need to export LNG why don't we?

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Permalink Reply by Skip Peel - Mineral Consultant on March 26, 2010 at 10:03

It pains me to see so many joining me in the "naysayer" category. It does not take an advanced degree or thirty years experience to see where we are headed in the short term with nat gas prices. The gas bubble has been building all through the winter when optimists said a cold winter and strong demand will draw down storage and support nat gas prices into 2010. Even as operators added rigs and announced increased capex for drilling to HBP dearly bought leasehold, the writing was on the wall. I think spot prices will hit $3.50 by early summer and advantageous hedging positions will become hard to come by. The third and fourth quarters of 2010 will see a wave of M&A's as majors with cash buy proven reserves and vast prospective leasehold at steep discounts. I think this is exactly what needs to happen. The Oil Majors are the only force that can defeat the Coal/Electric Utility/Railroad/Inland Barge, etc. lobby. And a national energy policy that penalizes coal and provides meaningful incentives for natural gas is the only path to increased demand and stable natural gas prices at levels that provide a reasonable ROI for the industry and energy prices that consumers and business will accept as reasonably affordable in light of the environmental advantages.

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Permalink Reply by essay on March 26, 2010 at 11:38

i've turned way more pessimistic than 3.50 HH spot i'm afraid, if it stops at that point i'd be ecstatic.

i remember when i heard chu say early on that we just couldn't do any kind of transportation with ng because of supply constraints my heart sank. he is either ill-informed about this and a few other issues or he is ill-informing people about the issues, pick one.

Permalink Reply by Skip Peel - Mineral Consultant on March 26, 2010 at 10:22

Lethal, Pres. Obama is a politician. Just like all members of Congress regardless of party. We can stand on soap boxes and preach to the choir until the cows come home. No, not the ones in South Caddo that cost CHK and Schlumberger $22,000. This is a political equation that has been tilted in favor of Coal for decades. And those elected Congressmen who do their bidding come from both sides of the aisle. Obama has already proved to be more a pragmatist than many would have ever imagined. I think he would embrace an energy policy that emphasized nat gas if there were votes in Congress to pass it.

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Permalink Reply by essay on March 26, 2010 at 11:40

concur. if this man's a pragmatist i'm a progressive.

i really do hope we see some incentives this summer but i'm pretty afraid of the form they might take.

it's like the end of ghostbusters where ray thinks of the staypuft marshmallow man who promptly shows up to lay waste to the city, i'm just trying to keep my mind clear.

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Permalink Reply by Skip Peel - Mineral Consultant on March 26, 2010 at 12:28

http://www.supportnaturalgas.com/page.asp?content=startpage&g=anga

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Permalink Reply by Bacon on March 27, 2010 at 3:59

I'd say let's all hope for a massive eruption of that volcano in Iceland as that would portend a bitterly cold winter but maybe there's a less destructive option.

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