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 November 18, 2021 at 2:49am

My oldest Son is currently an Analyst in a NON Energy sector ... He is working for a very well known Industry name ... The Outfits his company has 'Sell' opinions on , will often get no respond to his Departments  request  for additional Info or phone calls with Management ...... 

 

Been a full time Energy Investor for Many Years .... Usually 100% Invested in various names .... Currently sitting on the sidelines with about 80% in Cash ... Been a very Good year after a disaster in the Spring of 2020 due to Covid ..... 

 With Inflation running extremely high its not smart to let $$$ sit on the sidelines ..  But The Housing Bubble , the Stock Market Bubble has me concerned .... Interest Rates sooner or later must go higher ,, when they do , Housing could get ugly ...

Permalink Reply by farmgas on November 18, 2021 at 12:37pm

Very interesting Ralph.  Your family is on the leading edge of investment knowledge & potential upside for growth.  

You have mentioned the names of several gas companies possibly exposed for sell.  At what point could this happen?  Is it just "enough is enough" for no growth potential?  What are the signs that a company knows it is time to be sold and how do they behave?  Are the gas companies you mention showing those signs now?

Permalink Reply by Ralph cramdon on November 19, 2021 at 1:31am

Again Farmgas , there is no 'reply ' to your latest post .. 

 

In my humble opinion , CNX is the most likely to merge or bought out ...Over the years a company would generally get a 30% premium on the share price for a buyout ... Lately however its more common to have mergers of 'equals ' with very little premiums being paid out ... CNX is the most likely candidate to either be a buyer or a seller , they have done a good but uninspiring job of running the company .... The potential for growth is limited as it stands today ... EQT has been a mover and shaker the last few years ... and highly regarded , will they be buying more ? Who knows ...

The Haynesville has seen much action lately with Chessie and SWN making recent moves .. Piping the gas to the Gulf Coast is much cheaper and less regulated .... Haynesville is 'hot' 

N Gas Inventories have grown rapidly in the past month , a combination of warmer weather and much increased production ...  ,, causing me to watch the sector currently from the sidelines ..... Weather as always is the Wild Card ,,, some are predicting tough weather .... Cold weather would give gas producers a boost .... 

Inflation worries have become headlines and the market seems skittish 

Permalink Reply by Ralph cramdon on November 22, 2021 at 3:53am


Goodrich Petroleum has entered into a definitive merger agreement pursuant to which a subsidiary of Paloma Partners VI, an affiliate of EnCap Energy Capital Fund XI, will commence a tender offer to acquire all of Goodrich's outstanding common shares for $23.00/share in cash, for a total of approx. $480 mln, including assumption of the company's first lien debt.
The offer price in the transaction, which has been unanimously approved by Goodrich's Board of Directors, represents an approximate 7% premium to Goodrich's closing price on November 19 and a 47% premium to its year-to-date volume-weighted average price.
The tender offer will be subject to customary conditions, including the tender of a majority of the outstanding Goodrich shares pursuant to the offer, and is expected to close in December 2021. Upon the completion of the transaction, Goodrich will become a privately held company and shares of Goodrich common stock will no longer be listed on any public market.

 More activity in the Haynesville 

Permalink Reply by farmgas on November 22, 2021 at 1:30pm

Is this a typical example of how a gas company will either merge or be bought out?  Will we see any changes here in the Appalachian Basin?  

Permalink Reply by Ralph cramdon on November 23, 2021 at 12:57am

Seems to be a 7% premium on the deal .. In the 'good ol days ' , premiums often ran at 30% ...GDP ran  afoul with their experiance in the Tuscaloosa Shale in LA ... Lot of promise in the play , but drilling was tricky and very expensive ... Tuscaloosa was responsible for the downfall of Hawk and GDP ... 

 CRK owned by Dallas Cowboy Jerry Jones is still in the Haynesville ..... 

 

Chief or CNX would be my first GUESS for being involved in a deal , but wonders never cease .... Anything can happen .... 

Gas inventories are rapidly increasing and getting closer to 5 year normals , propane is also closing the 5 year gap , with prices dropping nearly 10% in a week  .... Gas players are mostly weaker in the past week or so .... I am currently out of the sector , but continue to watch everyday .... The past year has been good to AR and others ... If I had a say , I would be hedging 2022 production , currently in the $4 range for the year .... 

Permalink Reply by Ralph cramdon on November 23, 2021 at 2:09pm

Well Mr Biden announed the release of 50 million barrels of oil today , 32 million to paid back into storage sometime in the future ....

  Oil investors responded by driving up share prices of many oilers by 5% today ... The Oil Geek crowd rolled on the floor laughing at the announcement and opened up their wallets to buy shares of many oil producers .... WTI was up over 2% on the announcement .... Biden contends he has 'many ' weapons to fight high oil prices and has begun to attack the profits of producers including N gas producers ....... I guess someone forgot to tell Washington how the sector has for many years lagged the tech sector ,,, funny how Washington never complained on the high price of a Apple Laptop ...  I was a buyer today of a few quality N  American producers ......... 

Permalink Reply by farmgas on November 24, 2021 at 12:11am

Any signs emerging either one of the gas companies is signaling a change is coming?  

Permalink Reply by Ralph cramdon on November 24, 2021 at 3:27am

No announcements have been made ...  Anything can happen at anytime ..... RRC made a HUGE mistake several years ago investing heavily in the Deep Pink play in LA ........ . AR had a huge insider sell yesterday ...... EQT is well liked by the Analyst, the knock is their heavily hedged  

Permalink Reply by Ralph cramdon on November 24, 2021 at 4:23am

Quality US Oilers continue to trend much higher ... DVN , OVV , FANG having another good day ...  

Permalink Reply by farmgas on November 24, 2021 at 4:36am

Any CNX news?

Permalink Reply by Ralph cramdon on November 24, 2021 at 6:18am

Thanks for your comments Farmgas , it helps me put some of my current thoughts on 'paper' 

 CNX has a few negatives , one if the huge amount of hadges in place that are way less than todays price and the one year futures curve .. The other negative is the perceived limited amount of years left on their drill sites ... CNX  is a very low cost producer and some high quality lands , but these negatives will not inspire speculators to buy CNX shares ... Could a merger be possible ? The negative to any buyer is the amount of 'out of the money  ' hedges CNX has in place .. Tough to sell this to someone when you will be getting $3 for your gas while the spot market is paying $5 .... If and when gas relaxes to $3 range , a sale is probably more likely .. BUT , who knows , a sale could be announced today .....

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