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Ultra Petroleum Corp. Message Board

  • bqdoo bqdoo Aug 11, 2014 7:34 AM Flag

    Targets for end of injection season. Keeping my 3.1T target

    CHK board prompted this post.
    3.1T was my target in the spring. I did some minor investigation this weekend and 3.4 is not likely imo. I hold to my 3.1T target which should bode well for NG this winter. EIA site has 5 years data which was my source. In short, we need to have average the same as the 5 year MAX in injections over the next 3 months which would get us to 3.1T! That seems right to me with a mild/cool summer (yes I am still hoping Aug brings some heat but it has been mild sol far).

    Of course 3.4T or so it possible as summer has been cool and production strong in Marcellus and Utica.
    But I still hold to 3.1T.

    Sentiment: Strong Buy

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    • Hope you are right bqdoo. I'm now figuring storage ends up in the 3.4 to 3.5 tcf area. Things should get interesting next year. Mexico exports ramp up by .5bcfd in December or January and massive Coal Plant retirements of 14GW or more start in the Spring: the two combined leading to at least 3bcfd of additional demand and likely closer to 5bcfd. By next summer the market should feel the impact. The question is whether supply will keep up with new demand.

      Marcellus production growth has been truly remarkable but is showing some signs of tapering off (legacy well production decline over taking new wells or at least closing the gap significantly). Utica production growth is starting to enter the picture and is likely to grow substantially, though much of it is liquids. Eagle Ford production is still growing, but it too is rapidly being overtaken by legacy well declines.

      I'm figuring 3rd to 4th quarter of 2015 is when NG starts to run. It is almost certain to take off by 2017 when the LNG exports kick in hard along with another 1.5bcfd of exports to Mexico. Once its obvious supply isn't going to keep up with demand, we could see a period of at least a year with highly elevated prices as new rigs have a waiting period of 12 months. If oil collapses, some rigs could move over to NG, but that appears doubtful at present.

      • 3 Replies to rainbow3100
      • rainbow - I am much closer to your estimate than bqdoo and so is most of the energy world. If fact I hope we can end up between 3.4and 3.5 tcf because I consider that to be mildly agressive and bullish. Even a 3.6 however would be between 5 and 6% below normal levels before drawdown season. Therefore in spite of a lousy summer for NG we are not in dire shape. It is for this reason that I believe that UPL and many other NG stocks are oversold.

      • go back to the sd board you are getting nowhere here and sounding rather light headed.........exports are end of the decade except sabine pass .................6-7 nat gas not in the cards anytime soon weatherman..............spam on

      • Yeah, the incredible winter (big rally) followed by incredible cool summer is really empowering the bears again. I do see and agree that there is near term pressure whenever mild weather is present, and since Marcellus is strong and Utica ramping NG is weak. I see 3.3t very doable, but I did look at numbers this weekend and I really don't see your 3.4t estimate. Again, lots of variables, but I listen or read many e&p con calls and all of them have various issues/challenges, but NG production is not one of them even though all of them are NOT investing heavily. Unfortunately, I was right on associated gas from liquids drilling being strong.

        I was clearly wrong and early about our inept leadership. Cleaner NG verses oil/gas/diesel at $4 - $24 equiv for barrel at $97 aka 4 to 1 price advantage. I can't understand how government hasn't gotten behind demand generation and accelerated it (Picken Plan or similar).

        One thing I happy about is we are closing in on 2015 now and our thesis is not if but when, so the longer we hold the spring, the bigger the pop may be!

    • laughable

 
UPL
15.77+0.48(+3.14%)Dec 19 4:03 PMEST

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