The whoosh sound is CHK Natgas flowing up to keep NYC office buildings cool tonight , where the low will be in the 80s at midnight. Oh, and the traders are very aware of how the extra power they need is generated. And its not coal, and its not nukes, and it sure aint renewables.
I don't watch the current NG contract, as much as a watch the futures price about 9 months out. That is the price that will control investment decisions. Those prices have risen about $0.50 in the past two months and keep climbing. Now with cash in the pocket, those prices should allow SWN to begin to complete drilled wells, and plan to bring on more production at an attractive present value to the amounts needed for investment. Also should be enough to call back the drill squad and start mobilizing the rigs for a slow steady build up of the very prime acerage.
cash price of gas is down big on the East Coast. Gulf Coast price barely moved. It moves a lot for short term supply demand. The 10 day forecast is for hot sticky weather on the East Coast. It can turn around in a day. Watch the 12 month average of gas futures to see where SWN cash flow will go. ITs still above $3. Way up from just a few months ago, and high enough to restore low cost drilling locations.
Ah, don't let the wall street computers get to you. There is still a 12 month of forward pricing above $3gas. That is up over $0.6 from just a month ago. The company will be showing positive progress on cash flow and debt management. Just let today go. Somebody is dumping energy across the board. no particular reason i can see.
20% short interest. Risk / Reward not too favorable for those holdings. Better switch than fight dudes
Gas Pricing up $0.30 this week. That is worth over $200MM/year to SWN bottom line. That is $0.33/share even at the diluted amount. at 10X earnings, that should be worth at least $3/share pop.
Per latest investor presentation. Compared to 2016 , the current oil and gas prices will produce cash flow in the range of +600MM$/yr. That more than wipes out the expected earnings loss for this year, and more important means we can earn over $1/share rate going forward. And if we drill more holes in the ground, its all up from there.
So wil $3 gas as far as the eye can see, they can sell all the acres they need to service the debt . no problem. no fuss, no muss, so lets get back to free cash flow analysis to determine value. and its higher than right now.
This stock is an easy triple from here. Look at stock price, the last time gas was over $3.50
most of the added inventory has already been absorbed. Price block is off, its all about the gas price. At $3-3.50 going forward, this stock is an easy triple from here. 40 by Next Summer.
Very disturbing data from EIA today. Marcellus pricing is not participating in the Henry Hub price rise. Too much of SWN production is from there and can't get out where it receives a higher price.
they are showing 8$B of plant facilities on Balnce sheet. and Market cap is 5$B. Sell it and be done with the business if its not making enough . Or just shut it all down for 3 months and then sign some long term contracts. that make sense.
my take is that they strip price is up enough to lock it sales into next year, and resume well completion. Pipeline takeaway capacity should be in place so they capture the full pricing relative to new hedges. This is good, revenue should take off, and free cash flow builds from here. ideally they only invest the cash flow and stop with the credit card.
i check every week.. Illionios coal price is flat??
Im looking at coal inventory which is still 50 MM tons above normal, and Coal burn is down 15% yoy. So, coal production is down 30%, but when will inventory drop to normal levels, so pricing can rise??
It seems like a math problem, but i can't figure it out. Also need to know if Coal burn tries to climb back toward last year if and when NatGas price rises above last year.
Help you guys.