SAN FRANCISCO (MarketWatch) — As the winter season draws to a close and the energy market readies for a slowdown in the need for heating fuels, natural-gas prices should be falling. They’re not.
Instead, prices have climbed over 9% month to date, with the market betting on a tighter supply and demand situation following a cold winter season, signs of a recovery in the U.S. economy, a drop in drilling rigs, growing uses for the fuel, and a shift away from coal-fired plants.
‘Natural gas is like a sleeping giant, waiting to be awakened.’
Kevin Kerr, Kerr Trading International
“Demand on a massive scale is coming,” said Kevin Kerr, president and chief executive offer of Kerr Trading International.
“Supplies are getting tighter and demand is increasing,” he said, and that’s likely to happen dramatically in the next five years as new technology and usage comes online. “Natural gas is like a sleeping giant, waiting to be awakened.”
Natural gas has a good future as far as demand, but it is in the future. you need to remain a solvent company until then.
LPR needs to have good 2 year hedging program to generate some revenue visibility and needs to also
come up with a way to attract capital.
The bond issue did not solve the problem, just increased financing costs. The company needs to figure out
how many targets are within their infrastructure and then approach financial investors for a joint venture in
these wells. within the costs allocated they could recover the infrastructure (large portion of their debt) and
accelerate the cash flow building. the financing cost will kill the company if they do not do so.
If they do so, they could also start derisking the newly acquired lands (I believe their original 50,000+ acres
are partly with infrastructure and mostly derisked, but not drilled yet for the most part).
It should not be very hard to farm out the 50,000+ with a financial investor and to use that money to really
accelerate debt reduction. it will take a year and a half (might be too late to ramp up this winter), but if you
want to sell out, you will always get more if you do not depend on selling out.
Only my opinion.