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Penn West Petroleum Ltd. Message Board

  • infinitidrivr infinitidrivr Apr 18, 2013 10:50 AM Flag

    CIBC Presentation--A question

    Why doesn't PWE think nat gas stays above $4? I was looking at nat gas futures on the Nymex and its north of $4 for all months up to several years, closer to $5 as one moves out several years. Am I missing something?

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    • ador Apr 18, 2013 12:11 PM Flag

      They don't believe the current price is sustainable- cost of drilling gas well is six million dollars (US) can't make money below $4. They will be very focused on cutting cost and concentrating on becoming the largest light oil producer in Canada.I think this company is on the right track , sooner or later ,hedge funds and institutional investors will get on board.
      There is a lot of money on the sidelines that missed the last rally and will not make that mistake twice.

      Sentiment: Strong Buy

    • I also thought that was a strange response. Yes there is a lot of capacity but production is declining and use is going up? I have wondered how much storage capacity of gas PWE has that they could take advantage of this recent spike in prices? He did not rule out focusing on gas just that it was not a near term decision when their margin is so much greater on oil. I thinking gas would have to go over 5.00 for PWE to start drilling for gas again.

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