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  • nsleesman nsleesman • Jul 12, 2009 9:03 PM Flag

    BP and Exxon will own 85% of north American natural gas production….

    if gas prices remain in the $3 to $4 range for the next two years. With the economy in the tank (low demand) and gas production still increasing (growing supply) most of the current gas producers will be bought out after their current hedges terminate. They will have more debt than they can service.

    The only real question is, can they liquidate at a price to cover all their existing debts ???

    The banking industry didn’t think it could happen to them. The auto industry didn’t think it could happen to them either. The real estate crises was laughed at first.

    I’m telling you, Houston we have a problem !!!

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    • Rusty_Wallace_Fans Rusty_Wallace_Fans • Jul 12, 2009 10:03 PM Flag

      Are you planning to be the long wolf who thinks NG production will continue to increase when virtually everyone else thinks it will fall by about 10% YoY???

      Our beloved government who hates "oil" companies (synonomouse with NG in this case) will not let BP or XOM gain too much control. I suspect they would go the other way and force the large firms to divest into small firms such as are trying to compete now. Do you have any basis for your claims or do you just want to start a thread on a Sunday night.?

      • 1 Reply to Rusty_Wallace_Fans
      • mori_cnc_guy mori_cnc_guy • Jul 12, 2009 11:12 PM Flag

        We for sure have fewer rigs producing right now. The main questions in my mind right now are...
        1. Will declining production balance with weaker demand before hedges expire in a big way?
        2. If we begin to see some improvment in the economy or other factors could we find ourselves in a situation where we have cut production so much we can't satisfy some short term demand increase?
        3. I tend to believe if one is looking only at the U.S. for signs of economic recovery they will miss the inflection point of recovery. I think other economies in the world will turn earlier than the U.S. Any thoughts?

 
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