Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on October 9, 2008 at 11:42

Snake, if the skirts are still good I'll give you a half book of Green stamps for 'em.

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Permalink Reply by Snake Stewart on October 9, 2008 at 12:14

If I wasnt so far in the hole on my portfolio, I would sink half of it in O&G right this minute.Gold is way too high for my blood and I dont think there are many more tangibles more important than energy right now.
You cant dump several trillion cubic ft of gas on the market and expect prices to stay high without increased demand. These guys knew this coming in and had to figure part of this in from the getgo.We just have to trust that they know what they are doing and get this thing floating upright again.

Permalink Reply by Snake Stewart on October 9, 2008 at 12:16

Hey Skip Peel, How good is good? I know I havent caught anything on them so they shouldnt smell fishy or anything! HA!HA!

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Permalink Reply by BirdDawg, plain ole' idiot on October 9, 2008 at 15:31

Snake,
I really do not think that the present gas glut and the low NG prices is the reason for the companies backing off on the leasing. The real reason is the economic downfall. Gas prices always fall this time of year. I am not arguing with you, please.

Permalink Reply by Dorcheated A1 on October 9, 2008 at 11:58

Jay,
Your one of the smartest guy's on here your suppose to be calming me down. Everybody on this site look's to you for guidance don't scare me. I'm dead serious about buying about$1,000 worth of that CHK stock not a lot of money to some people but a great deal for me. I'm confident enough to invest in them because these hard time's will pass and when they do...$$$$$$$$$$. I'll even take you out to Superior Steak house. Let me also add that I agree with Skip Peel I in no way intend to hurt anybodies feelings I understand a lot of deals went bad but maybe just maybe it might work out better in the end for all of us.

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Permalink Reply by K_Bain on October 9, 2008 at 17:19

Dorcheated A1 - I have a feeling CHK may get as low as $12/share from some of the reading I do. Even if you buy know, I don't think that any short-term losses will amount to much if you can spare a couple of thousand.

I would have never thought $12/share, but we pushed close to that today :( Still, you and I look to be about the same age. We have 20+years to work this off. Look at this as a time to buy some discounted properties. The stock loss in the Great Depression took over 20 years to build itself back up. But it did.

What goes up, must come down - it just did. But it will go back up.

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Permalink Reply by Martin on October 9, 2008 at 12:19

Folks --
If memory serves (and I am old enough to be acquainted with the term "senior moment" as a personal event, just not observed), there was a thread several weeks ago after Chesapeake announced they would would cut back on their drilling activities for next year by 17% - and reducing their budget for the next three years. They announced that they would reduce their active drilling rigs by 17, leaving about 157 active next year. One contributor to the discussion went through the mathematics - when you deduct the lease acreage HBP, they should be quit capable of drilling a single vertical well on each leased section they have in the Haynesville within the next three years. Of course, that assumes that they put all their drilling rigs into Haynesville shale.

Also, Chesapeake may want to do horizontal drilling to increase the production per well for cash flow.

Who knows? Our first goal, personally and as a country, is to get through the next several months with a reasonably functioning economy. One that happens, things will be better. like the flight attendant says, "Place your seats in the upright position, fasten your seat belts, and lock your tables in the vertical position. There will be turbulence. Air sickness bags are in the pocket on the back of the seat in front of you."

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Permalink Reply by Snake Stewart on October 9, 2008 at 13:05

I have already used up my bags in the past 2 weeks.Does anybody have an extra one?

Nice post Martin. When you look at their figures closer,the downward trends werent as big as they appeared and had little at all to do with the Haynesville.When you look at the overall reductions it was actually a drop of only 2% in both categories.

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Permalink Reply by LP on October 9, 2008 at 13:09

Natural Gas Futures Rise as Traders Buy Before Heating Season

By Reg Curren
http://www.bloomberg.com/apps/news?pid=20602099&sid=aY4_EPsvJKL...


Oct. 9 (Bloomberg) -- Natural gas in New York gained after prices slid to the lowest in a year, prompting buying before the start of the heating season when demand for the fuel peaks.

Natural gas has tumbled 50 percent since closing at a 30- month high of $13.577 per million Btu on July 3. Utilities and industrial consumers can buy the fuel now to guard against higher prices that may come as demand rises and outstrips production.

``Gas is going to hold around $6.50 because if you go much lower, a lot of supply will come off the market,'' said Tom Orr, research director at Weeden & Co. in Greenwich, Connecticut. ``With cold weather arriving, prices may be more like $7.50 to $8.''

Natural gas for November delivery rose 8.3 cents, or 1.2 percent, to settle at $6.825 per million British thermal units on the New York Mercantile Exchange. Gas fell as low as $6.51 yesterday, the cheapest it has been since September 2007.

Natural gas for delivery in February 2009 is trading at a premium of about 66 cents to November product. When gas for future delivery costs more than near-month contracts, it's a situation technically known as contango, which encourages companies to boost stockpiles now for use later.

``Gas is a screaming buy right now, especially if we get above-normal heating demand this winter,'' said Chris Jarvis, president of Caprock Risk Management LLC in Hampton Falls, New Hampshire. ``You could have a big withdrawal season, perhaps as much as 2.5 trillion cubic feet.''

Stockpiles started the previous U.S. winter at a record 3.545 trillion cubic feet in November 2007 and declined by 2.31 trillion by the end of March in a normal winter, Jarvis said.

Cold Winter Forecast

The approaching U.S. winter may be the coldest in five years, especially in the eastern part of the country, Joe Bastardi, a forecaster for AccuWeather.com, said yesterday.

A lot of production may be taken off line as prices languish at a time when demand increases because of lower temperatures, said Jarvis.

Chesapeake Energy Corp., the second-biggest U.S. independent natural-gas producer, cut its output growth forecasts on Sept. 22 and lowered its capital expenditure budget by $3 billion through 2010 because of slumping energy prices.

A government report today showed that U.S. supplies advanced in line with analysts' expectations, keeping inventories in a small surplus to the five-year average.

Inventories gained 88 billion cubic feet in the week ended Oct. 3 to 3.198 trillion cubic feet, the U.S. Energy Department said today. Analysts forecast an 87 billion-cubic-foot advance. The average increase this time of year is 69 billion.

Five-Year Average

The increase kept supplies on a pace to be above the five- year average of 3.327 trillion cubic feet at next month's start of the peak-demand heating season. The surplus to the average widened to 69 billion, or 2.2 percent, from 50 billion, or 1.6 percent a week earlier.

Oil and gas companies had yet to restore 39 percent of the Gulf of Mexico's daily output of 7.4 billion cubic feet as of yesterday, following last month's hurricanes, according to the U.S. Minerals Management Service.

To contact the reporters on this story: Reg Curren in Calgary at rcurren@bloomberg.net.

Last Updated: October 9, 2008 15:24 EDT

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Permalink Reply by ChelleA1 on October 9, 2008 at 14:43

I have a question what if ya got your Draft 2 days ago???? Lot of money!! Does this mean it's worthless?? it was from Petrohawk I assume that's HK

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Permalink Reply by ChelleA1 on October 9, 2008 at 14:47

I also have a 2Yr deal that if they don't drill within 2 years from Oct. 1st they have to pay the same ammount again this is signed on the line deal Well I guess I would'nt be surprised if they somehow don't have to by the fine little print!!!

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Permalink Reply by ChelleA1 on October 10, 2008 at 16:17

I assume it is an obligation- that was part of the contract origionaly it was a 3 year option for renewal of the lease this is a better deal than 3 years...Just a little worried about a Draft I am not a demanding person I have read so much of people stressing thier point to request a check and not accept a draft but that is how they do bussiness...

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