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 Ralph cramdon on January 11, 2022 at 2:19am

Great question Farmgas .. Quarterly / Annual reports are hugely important ... Personally I am a big on Balance Sheets ,,,, its really simple math Assets minus Liabilities .... Owners Equity should be increasing on a regular basis ........... 

 Cash Flows are equally important ,,, I find Cash Flow statements inconsistent ,,, the SEC / Accounting  rules on terminology should be simplified and more  uniform ........ Some Analyst break down these Cash Flow statements pretty good , and much can be learned when they compare multiple producers in a sector ... Creditte Suisse and Merrill both produce some good products / essays .... 

 A fellow I know pours over each Statement and reads EVERY FOOTNOTE ....... PS He is hugely successful in this sector ...

Look at cost of production and EUR's , the most efficient operators are ones to consider , though other factors come into play /// [ hedges , how many drill sited left ] ? 

 Gassers have gotten some play here as cold grips the East ..... Forecasts play a big role in the ups and downs of the gassers ... tricky business ..

 Did you see that NY State has banned new gas hookups in 2030 ????? These people are crazy ....

Permalink Reply by farmgas on January 11, 2022 at 2:44am

Thanks Ralph... my concern is that some of these reports show past performance and could show a trail of good or even stagnant performance.  It is up then to the observer of these reports to make a judgement whether a gas company will continue that performance.  My problem with some of this reporting is that it doesn`t project or sell news how it`s going to sustain growth or improve it.  Otherwise in my opinion, its all reported on an after the fact basis.  It would be great in my view to provide information on how the gas company plans to be worthy of investor support going forward.  The marketing aspect has diminished in my opinion.  Because these companies are an "exploratory" based company, tell us your plans to explore for more gas! 

Permalink Reply by Ralph cramdon on January 13, 2022 at 3:46am

Your post had no 'reply' button .. 

 Watching for growth in reports is important ,, cost reduction is another spot to watch ... AR had over paid for pipeline capacity and that hurt the stock in the past , those issues are quickly abating .. COG also had pipeline issues, and limited future drilling sites hastened the merge with XEC ..... One fellow I know , a Wall Street 'muckity muck' is a total geek ... He spends most of his time reading Company reports and with all this effort still often get things wrong ... 

Permalink Reply by farmgas on January 22, 2022 at 3:42am

Ralph, a no reply often shows up...don`t know why

How would you define growth?  More production, more wells, less cost to drill per foot, expanded core area....  A gas company can simply just open valves to achieve production growth.  A gas company can not ship NG without pipelines in place.  Would news of a new pipeline create more interest in a gas company.  Do gas companies ever become joined with new ownership for an NG electric generation plant thus creating a market for their gas?

What are the negatives to be found in a report?  Depletion of core areas for new wells, older wells near decline status, etc

Or is it entirely a financial review with conclusion for success or growth or being stagnant ?

Permalink Reply by paleface on January 23, 2022 at 12:56am

Natural gas is trying to tred water in a political environment that is trying to drown it.

Permalink Reply by Ralph cramdon on January 23, 2022 at 1:48am

NY has banned any new gas / oil hookups for new buildings starting in 2027 .. They want its peeps to heat with electricity ...... IDIOTS !!!!! No wonder 1 out of every 60 NY Folks moved out of State last year ...... 

Permalink Reply by Ralph cramdon on January 23, 2022 at 1:59am

COG did indeed built relationships with new gas generation plants .... A solution to its ongoing issue of pipeline restraint capacity ...... 

 Wall Street has done a 180 on Shale growth ... Wall Street now DEMANDS Free Cash Flows  in place of reserve growth ..... Producers had been able to borrow on increased reserves , now the Banks want to see good rates of ACTUAL returns ..... AKA Free Cash Flows ..... 

 A lot of consolidation going on especially in the Haynesville .... Strong Rumors this week that CHK is buying Chief .. Chief is a major player alongside CHK and CTRA [ COG} in NE PA , EQT recently eneterd the area as well ....... 

 Saw a Cash Flow projection this week ,, AR predicted to have a 22% Free CAsh Flow return this year ..... A very decent number if it becomes reality ......... 

 Gassers will react to the overall DOW Averages .. A crash in the Dow will effect even quality outfits .. I remain extremely cautious... While no fan of Bitcoin a recent 50% drop is worrisome overall .... Housing is also in extreme bubble ..... Warning signals abound .... Take your best guess on the future , none of us know for sure .......  

Permalink Reply by Ralph cramdon on January 25, 2022 at 1:48am

CHK just expanded ... They bought NE PA producer CHIEF .....

Permalink Reply by farmgas on January 25, 2022 at 2:10am

Who`s next on the block?

Permalink Reply by Ralph cramdon on January 25, 2022 at 4:29am

AR / CNX both have been quite ... Take your pick ... 

 

Watch the DOW ... A sinking DOW will consume just about everything .....

Permalink Reply by farmgas on January 25, 2022 at 6:25am

Which one is more attractive to a buyer?  Would a local buyer be more interested to merge core areas?

Permalink Reply by Ralph cramdon on January 25, 2022 at 11:59am

Which one might be next ??? Everything is for sale at the right price .... Offers / rejections happen frequently .... CNX has more urgency to make a move with its limited number of remaining drill sites .... AR numbers could be the envy of the gassers this years ,,, all of this is weather / storage dependent .... 

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