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Ultra Petroleum Corp. Message Board

  • coltaims coltaims Nov 5, 2013 2:21 PM Flag

    Where are the drillers? NG supply heading down.

    UPL 's Michael Watford --" we use Genscape year-to-date data. If we compare 2012 average production of what, 64.2 Bs a day to 2013 average of year-to-date production of 64.6 Bs a day, it's gone up, but it's not a big mover. Again, domestic production has been pretty flat since middle of -- well, since well over a year ago. And again, I think, we're getting through some of the uncompleted, unconnected wells in Marcellus, and I guess we have that in Utica. But I think that backlog disappears first half of 2014 or reduces significantly, and the current drilling paces won't maintain this level of production."

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    • The only thing keeping NG supply flat to slightly up is the backlog of completions in the Marcellus. Both CHK and RRC have stated that they are hooking up more wells than they are drilling.

      Obviously this situation cannot continue without a severe demand/supply imbalance. It's almost certain that the price of Natural Gas will go up. This is not a good thing for consumers.

      There is a 20bcfd demand build coming in just a few short years. LNG exports, Coal Plant retirements, Industrial use, and a slow build in the Transportation Sector.

      Supply has been basically flat for more than a year, but that is soon to change. CAPEX plans are already in for 2014, and nobody is drilling for Dry Gas.

      This is an absolute disaster waiting to happen, the poor consumer is going to see their heating bills go thru the roof. Obama needs to do something about this and force the greedy Oil Companies to drill more NG and keep the price low - LOL.

      I'm planning on making a killing in NG in the next few years. Get in early and ride the wave, diversify as well, but no doubt about it, NG is heading up.

      How in the heck are we going to be able to build supply by 20bcfd in 3 to 5 years even in a high priced market?

      Mexico exports of 3bcfd coming soon.

      LNG exports of 5bcfd or more.

      Canadian Imports down by 2 to 3 bcfd.

      Coal plant retirements of 5bcfd or more.

      Industrial growth including gas to liquids of 3 to 5 bcfd or more.

      Transportation - Long Haul 18 wheelers, local fleets and railroads slowly building demand as well.

      Obama, please help me. I don't want to have to pay to heat my house.

      • 2 Replies to rainbow3100
      • Don't forget our friends at ConEd who are converting buildings (like crazy) to NG in the NE and the Pipe Line MLP's rushing to build out delivery to this area ....

      • Currently, the economics of natural gas are terrible for the producers so supply will decrease in 2014 as the backlog of completed and capped wells mainly in the Marcellus is brought into service.

        The good and bad of natural gas markets is that they trade on the short term outlook. Currently markets are well supplied, but once supplies start to show consistent decreases then prices can spike quickly along with the UPL stock price.

    • Good point and positive for the price of NG which looks like it bottomed today on short term. Went long this morning on the NG play using UGAZ and very long on UPL and expect the lower 20's again in few weeks at a minimum with upside next year to be nice for the progress on current initiatives and bringing online the new acquisition benefits.

      Sentiment: Strong Buy

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