Surging Natural Gas Prices

How are the surging natural gas prices affecting drilling this year, and what about going into 2022?  Are the gas companies taking advantage of these higher prices?  What`s next?

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Permalink Reply by farmgas on October 27, 2021 at 8:56am

In Western PA the smallish private size companies are planning new pads & wells particularly in Armstrong & Westmoreland Counties.  The larger public companies do seem to be holding back on growth.  Without growth won`t they soon dwindle on the vine without new wells to replace declining ones?  Are investors not interested in future growth anymore?  Show me the cash now!!!  Any thoughts who might be interested in CNX?

Permalink Reply by Ralph cramdon on October 27, 2021 at 2:59pm

Trouble with CNX is twofold ... Perceived lack of future drilling sites and CNX is hedged heavily for future years , those hedges today are underwater and unattractive ..... 

 Public Companies are spending just enough to maintain current levels of production , for many that is roughly 50% of what was spent prior to the Covid meltdown ....... Banks , Investors now demand profit over growth ..... Small Companies with decent ground and capacity to sell their gas to a pipeline system stand to make some money with todays gas price over $6 ... Good Questions Farmgas ,,, the Energy sector has been drastically altered since covid .... 

Permalink Reply by farmgas on October 27, 2021 at 3:23pm

Great answers & insights Ralph, thanks!  CNX has a significant amount of drilling sites in their CPA South & North region.  They just need to start developing that area!  Tomorrow is their 3Q reporting day.  Will it be more of the same or some news of busting out into that area?  Maybe several of those smaller private companies could show interest in a public company to unlock their restraints.  Snyder Bros., APEX Energy & Olympus Energy come to mind as aggressive smaller private companies.  I`m fearful of how the gas energy world has changed...

Permalink Reply by farmgas on October 28, 2021 at 12:21am

Ralph, how would you evaluate what CNX has just reported for 3Q results and future (???) plans for increasing production?  How will investors view this report?

Permalink Reply by farmgas on October 28, 2021 at 8:16am

Can a gas company cancel their hedging contracts?  Would they pay a penalty?  Otherwise how will the major gas companies benefit from the current market?

Permalink Reply by Ralph cramdon on October 28, 2021 at 12:07pm

A producer can sell off their hedges , they have in the past, sell occasionally when the hedge is 'in the money ' .. I have never seen a hedge sold when it was 'underwater ' ... That would be a direct use of Cash ,,... Hedging losses now being reported are basically a bookkeeping entry , with no direct loss of cash on hand ...... 

 EQT / CNX are heavily hedged .... CHK is 75% this year and at last report 50% for next year ... Old COG , now CTRA is lightly hedged , but it suffers somewhat from lower NE PA gas prices due to lack os takeaway ,,,,,  GAs prices are all over the place , 5% up one day and 5% down the next ... Storage is filling up quickly , the unknown is what the winter demand will be ... Production today is much higher than last year , which is bearish ..

Permalink Reply by Ralph cramdon on October 28, 2021 at 12:11pm

CNX [ in my opinion ] is like the old COG , the market views it as 'stale' with little prospect of going much higher .... Of Course this 'opinion' is only as good as the next weather forecast and news headline ....Investors like growth ,, CNX today although its producing decent Financials , show little promise of growth .... I would think Major Holders of CNX are getting 'antsy ' and clamoring for either much higher dividend or a sale of the company  

Permalink Reply by william Allen. Ladd on October 29, 2021 at 12:45am

I am very proud of you Ralph! Proud because you are now really adding an important bit of information to the site!   Granddad Ladd

Permalink Reply by Ralph cramdon on October 29, 2021 at 2:24am

Sorry Mr Ladd , your previous comments on many topics still resonate ..... 

Permalink Reply by william Allen. Ladd on October 31, 2021 at 3:16am

No need to be sorry Ralph,  You did your best!

Permalink Reply by Ralph cramdon on October 29, 2021 at 4:04am

Farmgas , I have gotten a bit bearish on the Gas sector as of yesterday and have sold some major positions that I have held for the past year or so ... US production is continuing to rise , Propane Inventory levels  recently 21% below average have gained ground to now 17% below average ... Putin has assured Europe of adequate Gas supplies ...... Its been a great ride ,,, now as far as gas is concerned , I will be watching mostly from the sidelines ....

 All this conjecture remains dependent on the next weather forecast and the next political headline ....  

Permalink Reply by Ralph cramdon on October 31, 2021 at 10:28am

Pres Biden now 'begging ' OPEC for more oil .....Yet he declines additional supplies from Canada ......

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