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 February 18, 2023 at 4:42am

No reply button on your comments too, Ralph. 

Do the board of directors aware these shares of stock to the management team, or is it a plan organized by management only?

Very interesting insights about NFG.  I suppose the lease holders still enjoy their royalties though.

Is this a good time for buy-outs to keep the wheel spinning?

Permalink Reply by Ralph cramdon on February 18, 2023 at 10:58am

More power to the lease holders , they deserve honest payouts . Lots of Folks hurting in Appalachia , a $$$ shot in the wallet is helpful to their Families .. 

  Directors are the ones who vote on those Stock Options / awards ... With the Annual Reports currently coming out , it tkes some digging , but payouts / awards are listed ,, remember , those footnotes can be informative ...A stock I follow TELL is being sold almost everyday by insiders .... While they issue Press releases that everything is going smoothly ... 

Permalink Reply by farmgas on February 19, 2023 at 1:07pm

As market natural gas prices continue to plunge now do gas companies use their hedged prices to calculate royalties or spot prices?  How does this work out?

Permalink Reply by Ralph cramdon on February 21, 2023 at 3:16am

Some local members are better suited  to answer about  their royalty payments .. It is an interesting question Farmgas ... I have watched as Royalty recievers here have complained about outfits like the old CHK and its deductions .. Although sparsely used , this website has provided some interesting insights .. 

Permalink Reply by Brian Day on February 21, 2023 at 5:17am

Since royalties with Seneca are delayed for two months from actual sale, March or even April will tell that tale.  I suspect that adjustment is largely up to the producer and not legally dictated yet.

Permalink Reply by farmgas on February 21, 2023 at 5:46am

I have conventional shallow wells with Diversified Energy and they too pay 2 months after production.   It will be interesting to learn how the next several months play out.   I suspect the price used will fall below their hedged price.

Permalink Reply by Ralph cramdon on February 21, 2023 at 6:09am

I once owned Carbon Natural Resources , a thinly traded conventiional  gas player south of your region .. Carbon Natural Gas assets  was bought out by Diversified Energy after Carbon failed to generate enough interest to be listed on the NYSE .  

 When gas was trading near $9 last fall , what price did you and Brian get during those haymaker days ? 

Permalink Reply by Brian Day on February 21, 2023 at 6:11am

I did not have any wells in production at that time.

Permalink Reply by farmgas on February 21, 2023 at 6:38am

My wells are in the Indiana/Jefferson county area, and the highest rate was $7.85 last August.  That was nice.  January price was near $3.85.  The latest company statement indicates a hedged price for 2023 at $3.63 with 85% of their production hedged.  It`s that 15% that could or not be your gas production.  I`m not certain what impact that has on an individual royalty holder? 

Permalink Reply by Ralph cramdon on February 22, 2023 at 1:10am

$7.85 was a very good price , too bad producers couldn't control themselves to keep production level at that price . I have not looked at Diversified in a long time , I will do a bit of digging on it today . 

Permalink Reply by farmgas on February 22, 2023 at 2:11am

I have been very pleased with Diversified Energy so far.  They seem to make a strong effort to keep our old shallow wells producing gas.  They also make a strong effort in landowner satisfaction. 

Permalink Reply by Ralph cramdon on February 22, 2023 at 2:28am

Farmgas , good to hear about your relationship with Diversified . 

Looking at their Balance Sheet , their Assets are LESS than their Liabilities , as a guy with a degree in Accounting from a Major University , they fit the description of being Technically Bankrupt , though they recently financed a loan in the 7.5% [ which is not great , but not too bad either } . The good news is that they are 80% hedged for 2023 [ which was probably required by their lenders] . If they are not hedged for 2024 and prices do not increase by then , it could be a year of reckoning for this Company .. 

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