Hey nawar, appreciate your posts. Any thoughts on effect of falling natural gas prices on earnings and reserves.
Thanks for your input. I suspect the price drop has to do with investors concerned about falling ng prices. If your analysis is correct it's un justified.
According to the company sensitivity analysis ( slide 17 - http://www.equalenergy.ca/en/2011_equal_investor_presentation_-nov_final.pdf), a $1 decrease in MCF for the year from $4 to $3 will cause cash flow to dip by $4.3m; however a $10 increase in WTI from $90 to $100 will cause a $6.8m increase in cash flow; so far high oil prices have countered low NG prices to a large extent.In regards to reserves, reserves are established based on last year prices for both NG and Oil, I believe prices were high enough to justify an increase in reserves.Regards,Nawar
we appreciate all your comments nawar