Don't Kid Yourself Thinking AM Departure Solves Any Problem!
Aubrey McClendon is NOT responsible for where natural gas price is and where the entire US shale gas industry is today. Just because he departs does not mean CHK will sell gas for a thin dime of higher gas price per MMBTU. Just because he departs does not mean it will cost CHK less to drill a well. Just because AM departs does not mean that CHK's debt load are one dollar less. NO!
The fundamental of shale gas development has NOT changed. The fundamental is that shale gas is deeply un-profitable.
Stay away from the NG sector. Get into US coal mining for big profits in the next 12 months. I insist that natural gas price is going to go a lot higher, but not high enough to bring a comfortable profits to shale gas companies. The one that benefits is US coal mining companies. Coal is already profitable as of today. Coal will be insanely profitable if there is a looming natural gas crisis soon.
Stay away from natural gas players. Get into the coal mining sector. That's the right investment strategy to make the most money in the next 12 months!!! Look at the rally of ANR, JRCC, ACI today!
That may be true but its good that #$%$ is gone anyway. In typical Oklahoma fashion, he puts himself out there as a good CHristian, but has no moral or ethical compass. This is the state that gave you Karen Silkwood and is no longer allowed to have nuke plants. I am glad that loser is gone, he did a lot of damage.
Just because AM is gone does not solve the fundamental issue of the shale gas industry.
Shale gas is fundamentally un-economical. The entire industry lied about EUR of shale gas wells. AM is not the only one guilty. Any one care to dig out public information on well productivity knows that the wells decline much faster than the industry claimed.
But without even look at the wells, just look at how much capital that NG companies spend each quarter, just to keep roduction flat. more than 2/3 of capital spending of shale gas companies are spent to merely maintain flat production that brings only a fraction of the revenue compare with capital spent. This is un-sustainable.
Here's the real deal with coal.
Had my #$%$ into it $150K. Made a few dollars when ANR hit $7 way back when. Jumped out because it was way too risky. You being a coal man can remember when ANR was selling for $60. That party is over, my friend. However, I am not saying that ANR will not go from $8.82 to $10. That may actually happen. The breaking point between gas and coal is $3.40. There will be a balance there for awhile. However, gas will take over coal. The real problem with coal right now is much like US Nat gas. There is no way to export it. In 18 months or so, that is going to change. Not only will gas be exported, but the contracts have already been bought. Nat gas companies are going to fluctuate over the next year and there will be either of two times to buy in heavy. One, when the DOW drops to 12000 or in the summer when all the idiots will again be crying about some over supply. We have a six month wait. But don't get too greedy. At some given point, the market will move on it. I myself will buy into it when the DOW does it's dip #$%$. That's the safest way to go.
You are completely wrong. Most people say gas is replacing coal, but they are wrong.
The fact of the matter is in the natural gas space, conventional natural gas, the portion of supply that is long lasting and declines slowly, has COLLAPSED, as no one drills any conventional gas well any more. There is booming shale gas supply but only because they keep injecting huge sum of capital money to keep drilling new wells with no regard to cost.
The 11 TCF per year worth of shale gas production is kept up thanks to more than $125B new capital investment money per year. This is un-sustainable. As conventional gas supply shrinks further and shale gas needs to constitute 11 TCF/year supply, they are going to require $250B per year capital money injection per year just to drill enough wells to maintain supply, but the revevue from 11 TCF of shale gas is only less than $40B per year.
The point is, the investment community is NOT that foolish that they keep throwoing $250B a year good money to get back less than $40B worth of revenue. This WILL stop at one point, leading to a collapse of well drilling and collapse of NG supply.
Who will reap the biggest benefit from a looming NG supply crisis? The coal mining sector.
I am talking about a coall rally much bigger than the 2007-2008 rally. Major coal mining stocks like JRCC, ACI, ANR can easily go to triple digits. And it will happen well within one year.
Hows that PCX trade treating you Cadmium? Thanks again for your worthless analysis. NG is the future of the USA wheather you want to believe it or not. You'll see, just like you told us that PCX was not going to go bankrupt...
I have NEVER said that PCX would never go bankrupt. I said that there was some possibility of PCX bankruptcy but it was worth taking the risk consider the potential risk/reward ratio. If you hold 4 or 5 different coal names and one goes down while the other 4 brings you quadruple or more profits, it is well worth the risks.
You see, I lost about 35% of my porttfolio due to PCX bankruptcy. But the fear pushed all other coal stocks down and as a result my annual bonus received shortly after PCX bankruptcy allowed me to buy more shares than othewise possible. Those JRCC shares I bought way below $2 per share has brought me more gain by now that they more than offset my loss in PCX already as of now. But I am going to make a lot more, as the coal rally barely started yet.
JRCC will repeat the 2007-2008 run of going from $3.56 to $62.86 in 10 months. This time it will gain much more, going from $1.68 to $68 within 10 months from now.
I work for this company. You abjectly failed to mention Chesapeake's Oil production in the Eagleford Shale field. We are drilling as fast as we can in South Texas for this oil. The wells come online making 1000bbls/day.
1000bbls a day uh?,,,hmmm,,i doubt that,,,then what,,,drop down to 120 bbls,,,then to 30 bbls in 2 weeks,,,how many people hv they let go in the past 90 days,,,,,company vehicles are next to be turned in...
Don't kid youself thinking CHK is successfully transfering to an oil producer.
In Q3-2012, CHK produced oil/liquid at 143,000 barrels a day. That's equivalent to 0.83 BCF/day gas production equivalence. Compare that to CHK's 3.0 BCF/day natural gas production. CHK is still alrgely a gas producer.
You can't just waive a magic wander and suddenly CHK turns itself into an oil producer. Every barrel of oil produced comes from wells that cost a lot of money to produce, money that CHK is ill affordable to spend today that it is so deep in the #$%$ of existing debts.
Look at it this way: The entire US coal mining sector produces an EQUAL amount of energy equal to the entire US natural gas sector, or 2.5 times the energy produced by the US shale gas sector. But some how the investor community put 75 times more investment capital in the shale gas sector than the US coal mining sector, thinking that shale gas is where the money will be made in the next few years.
That's COMPLETELY WRONG. The US coal sector is already profitable at current coal prices. The US shale gas sector is deeply un-profitable and requires several times higher gas price to be profitable. People like Arthur Berman have been trying to warn people of the Ponzi Scheme. They went to the depth of BANNING Seeking Alpha authors who tries to disclose the Shale Gas Ponzi Scheme and warn people. That tells you something.
When 75 time more people bet their money on the wrong side and wrong sector, the opportunity to make money is bet on the other side that most people ignored. Get into coal now and thank me 12 months from now.
Natural gas price is going up a lot higher so that coal is very competitive in fuel cost. But the gas price will not get to point high enough for shale gas to be profitable. That would require gas price well above $10/mmBtu. We will not get there and sustain that high without demand destruction in natural gas consumption.
Bottom line, the coal mining sector is where you should be right now. Coal is already profitable at current price, but natural gas is deeply un-profitable for shale gas producers.
You are full of it!
You're pumping a fuel that the Obama Administration and EPA are forcing out of US power plants!
Power companies are building Nat Gas plants for more power and to replace coal plants because it is too expensive to clean the pollution from coal.
Go peddle you spam somewhere else!
Sentiment: Strong Buy
Obama's policies show that he hates coal and is trying to destroy it. The EPA under his direction is killing the sector. Of course we don't want acid rain but there are safe ways to burn coal. In the past the coal plants were allowed to meet new EPA standards over time. To help mitigate the cost. I bet the regulatory department of each plant eats up about 10% of gross profits. I work in the oil field and we spent a lot of money just in our regulatory department to read and figure what the new regulations mean and how to comply with them. A coal plant hasn't been built in years because of the permitting process is to crazy and long. It's takes years and millions of dollars just to go through the process and then possibly get a rejection. No investors want to risk it.
Nonsense. Obama can not dictate what fuel the economy burns to generate electricity. It is dictated by fuel cost economy. Back in April 2012 natural gas price was so low that it competed with coal to the point that utilities generated almost an equal amount of electricity from coal and from natural gas. 96466 from coal versus 95346 from natural gas.
But by November 2012, we were back at 128,992 from coal, a gain of 33.7% for coal. And the natural gas usage decreased to 79,707, a drop of 16.4%. Coal is still the King and natural gas is back down to regular consumption level.
Get into the coal sector now. That's where you make big profit from the cyclic movement up.
Today's rally is a good opportunity for people to get out of CHK and into the coal sector.
For the record, I do NOT have any position in CHK. I have repeatedly said that there will be a good opportunity to short natural gas players. But that will occur when gas price has risen to a more comfortable level, NOT today. The right strategy is ride coal stocks up now, and then ride natural gas stocks down in the mid-term future.