On Friday, UPL moved up quite well and for the first time outperformed SWN and RRC. Nat Gas is almost at a 6 month high again at 3.78
When they report in Q1 2014, they will be reporting far more in total proven Nat Gas reserves. Last year it was valued at 2.9B with an average gas price of 2.63. From the chart above you can see that the low for 2013 was around 3.1 and the average closer to 3.4-3.5. This should put their reserves at $4B or so.
Hopefully, they are a couple of weeks away from finalizing the Uinta Basin deal.
Now, things are looking up from a weather point of view which seems to directly affect Nat Gas prices.
I think Powerburn will be increasing the drawdown numbers for the week of 11/23-11/29 and 11/30-12/6 drastically.
The period 11/23-11/29 should be the first full week where we have drawdowns on all 7 days. The report on 11/21 (for the week of 11/9 - 11/15) when we had a drawdown of 45, we actually had drawdowns only on 3 days and injections on 4 days.
I would be surprised if we have anything less than a drawdown of 130 for the 11/23-11/29 period. We had an estimated drawdown of 17 BCF yesterday and we could easily get close to a drawdown of 30 BCF today. (we are at 21.39 as of now). The forecast for the next 5 days is more of the same. Sunday (today) might be the coldest day though.
300 is significant because we wouldn't still officially be in winter until the 5th week from now.
Last year we had a pretty good winter. This year even if we have a so-so winter, it is not going to be dire because we will already be 300 below last years levels at the start of winter.
Last year's winter readings (12 readings after the period listed above were): -74, -126, -201, -148, -172, -194, -118, -157, -127, -171, -146, -145.
So, we could come in about 25 less than the corresponding numbers for each of the 12 weeks. That should not be too hard to do, unless we have an extraordinarily warm winter. (-49, -101, -176, -123, -147, -169, -93, -132, -102, -146, -121, -124)
That should get us around to the period where Mike Watford is suggesting that production should drop and consumption of Nat Gas for electricity generation should be going higher with more coal plants coming off line. Also, that should bring us 6 months closer to exporting of nat gas to Europe / Asia becoming a reality.
I think people are too negative about Nat Gas. The price disparity between the prices in the US and Asia / Europe is ridiculous (3.5 to 18). At some point this has to change. I am thinking that it might happen sooner than people realize.
What I mean is that we won't have a doubling of prices overnight when the first export facility opens up. Nat Gas Prices should start running up well before that.