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 9, 2024 at 4:56am

Gas price is up 25% in the past month or so ... Producers not really higher as gas has marched up ... Dramatic bullish  projections on gas storage by the end of Jan . 

Permalink Reply by farmgas on January 9, 2024 at 11:19am

Serious cold wave coming to PA next week.  Old Man Winter taking over now.

Permalink Reply by Ralph cramdon on January 9, 2024 at 4:41pm

Bout time things get colder .. Large positions in two producers ,started within the past few weeks 

Permalink Reply by Ralph cramdon on January 11, 2024 at 2:39am

Chessie buys SWN at $6.68 a share .. SWN shareholders are unhappy . SWN brass get big payday ....

Permalink Reply by Ralph cramdon on January 13, 2024 at 5:15am

Watch for gas well freeze ups .. Gas up nearly a buck in the past month or so ... Chessie shareholders happy , SWN holders not so much ... In the long run SWN shareholders should happier ... SWN share count of over 1 Billion was a drag and so was debt .... New combo now largest producer by far ... Consolidation will continue , it always has in the past ... AR is a prime candidate , so is RRC ... Not a prediction just an opinion , CNX , NFG less likely ....  

Permalink Reply by farmgas on January 13, 2024 at 5:29am

Hows that sunshine Ralph?  Are you seeing the forecasts for much of the US.....cold & snowy!  Burn that gas America!!  For the less likely consolidation gas companies you mention, what would be the motivation for another company to have interest in them? 

I`m rooting for a very cold winter.

Permalink Reply by Ralph cramdon on January 13, 2024 at 6:08am

Been very cloudy , breezy , and coolish here in SW Florida ... Yet still a very nice place to be . Yes , bring on the cold , one forecaster I follow says a warm up will occur after this cold event and then back to cold .. We need the cold on the East Coast population centers , though Texas cold is good as well . That Mid west cold will help Propane Inventories to get closer to the 5 year normal ... 

Permalink Reply by Ralph cramdon on January 13, 2024 at 6:16am

CNX has a limited number of wells left and will need to consolidate with someone .. So I kinda of Mispoke on CNX ..My original point was that CNX is less attractive , than AR , RRC .Its been awhile , but last I looked , CNX Balance sheet progress has not been very impressive despite being hedged , my last look has been awhile and I do need to take a glimpse at CNX currently .. NFG has its Utility division in addition to the production side .. Many moving parts to deal with ... Trivia ,,, EQT and SWN were both Utilities and producers years ago , now both are just producers . 

Permalink Reply by farmgas on January 13, 2024 at 8:38am

Is CNX considered to be a regional gas producer since most of their leases are in northern WV, western PA & central PA.  Are their core areas being drilled out?  If they were to consolidate would it be reasonable to think it would have to be with a another gas company in the same region?

Permalink Reply by Ralph cramdon on January 13, 2024 at 1:44pm

The CNX hedges are a burden .. I think they are recieving in the mid $2 range .. The word on the street is their inventory is lower than most and its clock is 'ticking ' Maybe they buy a local private owned outfit , maybe a regional player would be interested ,... Yes , the most likely player would be located in the same region ... Cutting down adminstrative costs is an attractrive first step when consolidating 

Permalink Reply by farmgas on January 14, 2024 at 2:27pm

Do hedges fix a gas company to that price?  Are hedges set for a certain period of time?  It sounds like a gamble for a gas company to hedge or not?  Is there generally a percentage of production that can be or should be hedged with the balance subject to negotiations? 

Permalink Reply by Ralph cramdon on January 15, 2024 at 3:22am

A producer who has high bank debt is usually forced to hedge to protect the bank loan ... Yest hedges are for a specified length of time , usually a month to multiple years . Most outfits produce hedge info qtr to qtr . 

It is a gamble indeed . Hedge too low in a rising market and profits will suffer ... Having a low amount of hedges in a dropping market is painful as well . Antero once was a huge hedger , now they are hardly hedged , CNX is still hedged almost to the max .. 

 Over time I have mentioned the 'old Farmer " , commodities tend to run in cycles , high prices then overproduction leads to low prices .. Hard to predict what the bottom is or the top ... 

 Don't chase when high prices are making headlines and don't be afraid when low prices are making gloomy headlines ... Hard to stay disciplined  

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