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Magnum Hunter Resources Corp. Message Board

  • nsleesman nsleesman Nov 15, 2012 11:22 AM Flag

    MHR's Marcellus/Utica Gas Potential

    The key to a higher base prices for natural gas is not in the exporting of LNG or nat gas as a transportation fuel.

    The future of Natural gas pricing is in power generation. As the government forces power stations to convert to nat gas from coal, these power plants will not be able to convert back to coal just by flipping a switch, EPA will see to that.

    The price of nat gas will then begin to climb to a higher support base that will encourage profitable drilling to resume.

    MHR will benefit from the base price increases and the NGL markup from the Mobley plant. The IRR should be better than $90 to $95 WTI crude.

    Try to be patient. Gary was right to concentrate his efforts on the Marcellus/Utica.

    good luck to all .....

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    • MHR is situated right in the sweet spot to sell gas to the largest users of NG in the country, the North east. We have have the gas and the pipe line to ship it. Sell the EF and pay off debt and we are sitting pretty. Imho MHR would be close to $10.00 if we did. The EF should get 500-600 million in a sale.

      Sentiment: Strong Buy

    • nsleesman, I partially agree/disagree. While I certainly think power generation, particularly the transition from coal to natural gas, will be a driving factor, I think fuel for transportation is an even bigger factor, as that's where the majority of oil is used, and that's the largest market for natural gas substitution. Natural gas will be competing with clean coal and uranium for power generation (and to a smaller extent, alternative fuel sources). More and more heavy vehicles are transitioning to natural gas, and once infrastructure catches up, more and more lighter vehicles will follow suit. *That* is the future of natural gas pricing, in my opinion. GLTA

      Sentiment: Strong Buy

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