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 April 5, 2023 at 3:14am

Futures show next winter in the $3.50 range . Still adding to an overweight   position in a SW gas producer.

Permalink Reply by farmgas on April 5, 2023 at 3:21am

$3.50 sounds positive...not quite like last year though.  What do you mean by a SW gas producer position?  Would you like to say which one?

Permalink Reply by Ralph cramdon on April 5, 2023 at 5:34am

Unable to paste this info .. Divversified and EQT are facing a class action lawsuit from abandoned wells in WV . 

Permalink Reply by farmgas on April 5, 2023 at 10:59am

I saw that headline today.  I`m sure there are many members on gomarcellusshale that have old conventional wells on their property who are concerned about their future.  It`s my understanding that a gas company will end the life of a well once production reaches a predetermined low level.  I also understand that there are gas companies who might keep a well open to avoid the cost of plugging it.  I see daily permits being issued by PADEP to Diversified Energy for well plugging.  I`m encouraged by this news to avoid wells being left unplugged and becoming a hazard to our members and to the environment.

I`m not certain what is going on in WV but I hope resolution is good for everyone.  I hope we learned a lesson from the coal industry, and it`s legacy of leaving land open after mining plus allowing the damaging effects of acid mine drainage water flowing into our rivers & streams.

Permalink Reply by Ralph cramdon on April 6, 2023 at 1:07am

The compliant seems to stem from WV land owners who claim the outfits hired by Diversified are doing a lousy job of plugging . 

 Diversified balance sheet is not strong , hopefully they can continue to fund their plugging program .. 

I have been told privately by a Diversified competitor that their legacy obligations are huge and that its a overhang .  

I am sure $2 gas is not helping 

Permalink Reply by Ralph cramdon on April 6, 2023 at 1:09am

There are a few quality names in that region .. AR , RRC , EQT all are investable [if your timing is right ] . I will defer to name the one I am into .. 

Permalink Reply by farmgas on April 10, 2023 at 2:45pm

First quarter reports later this month...anything new anticipated? 

Permalink Reply by Ralph cramdon on April 11, 2023 at 12:28am

Once again BOA produced an essay which they state that currently the gassers are much more investable than the oilers . Among the names they like are RRC , CHK , SWN , EQT. They recently had a 'road' trip to CHK and wrote glowingly of CHK . AR is never mentioned by BOA , I suppose AR doesn't do any business with them .. NGL prices which have been falling took an upward turn last week , AR , RRC , and to a lesser extent SWN are NGL producers .. Look for the lowest cost producers . 

 I am personally watching for results from EOG in OH , EOG is a high quality outfit . EOG has many moving parts , so a decent report from OH might not move the needle much . 

Permalink Reply by Ralph cramdon on April 19, 2023 at 4:50am

A lot of negative news out there .. After a decent past month , now a seller , not a buyer 

Permalink Reply by farmgas on April 19, 2023 at 6:20am

Who is receiving the negative news?   Any gas companies in trouble?

Permalink Reply by farmgas on April 19, 2023 at 12:47pm

First quarter reports coming out next week and a few weeks beyond.  Which gas companies will offer good news?  Who are the exciting one`s to follow.  Which one`s are staying the same without growth?  Which one`s offer a positive growth view of their company & the gas industry?

Permalink Reply by Ralph cramdon on April 20, 2023 at 1:38am

Thats a lot of questions .. 

 The short term outlook is dim , the long term outlook is much brighter with the future years priced higher than todays price . I would expect some gassers hedged next year in the mid $3 range . PA Marcellus gas is the most compettive in the Country . My current thought is that RRC , AR , EQT are the best positioned for the future . 

Due to the overall Macro enviroment of the Market and the economy , I am a seller ,not a buyer . Commercial Real Estate is a drag and soon Housing may make headlines as well .. Credit Card debt is rising and Inflation is eating away households with limited incomes .. Car payment defaults are rising as well . 

 I have witnessed a few times where stock portfolios have been chopped in half by the herd running from the market . I will try and avoid any train wreck looming .. The past month has been profitable , I am hunkering down for now and watching . 

Best of luck .. 

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