It is getting very old. You are adding to the problem of misinformation, discrediting this board as a place for information sharing.
Of course short term there is pain, change hurts. However, Goldman cannot argue that long run cheap products are bad. Markets take time to adjust, for human capital to find a more productive end.
Honestly, I have no idea. Extremely complex. Very smart people with a lot of money seem to be putting futures prices fairly low so I tend to assume that prices work well and that there will be a good deal of gas at cheap prices unless weather.
It is a young industry with well life cycles that go on for a long time. A large base of producing wells has been built up requiring less new wells to replace lost production each year. Also competitors are drilling now only in the most prolific acreage they own, aka high grading. Also wells are getting more efficient as ossremote stated.
I'm not trying to say I hate the number, Analyst consensus was 70, it's just not a pom pom shaking bullish number. Yes we are up 3 cents since 1030am.
I'll believe the bull market for natural gas when I see it... and believe me I'm praying to see it.
They just sold 2.5% of production/acres for $840MM - 12% of the value of the company! What a strange thing...
You must be a lot smarter than the futures traders who have pushed NG up 12 cents today
Agreed but the reduced rig count is expected to show its face at some point - this was a smaller build than expected. Inflows continue to outpace in spite of rig count until they don't.
To add, I have done some consulting work in the O&G industry and I think this product has a good chance of succeeding. More encouraged by O&G than Desal.
Yes, it is kind of ridiculous how poor they have done with a product that is patented and 100% necessary to build a modern mega-plant. I owned from $2 to about $2.80 a few years back - was surprised to see it back down in the high 2's.
"So one of the things I didn’t mentioned but base focus is a big priority for us this year. We want to look at - we’ve got a big refrac potential in the company. Chesapeake has drilled more horizontal wells than any company in the U.S. So we've got more refrac potential than any of the other companies."
- From UBS confereence
graphene would eliminate the need for high pressure RO and thus remove the need for large amounts of energy recovery devices. if you are a shareholder you should be somewhat fearful of the day when the potential of these products are realized. However, Lockheed Martin, who is one of the leaders in graphene technology has stated it will likely be 5-10 years before large scale graphene RO filters will be commercialized.
Cash got depleted because they spent the cash... I think they spent the cash because of 1 of 3 reasons. 1) They were contractually obligated to fill pipe / service contracts. 2) They paid debt or issued dividends. 3) They saw an opportunity with expected IRR greater than whatever their threshold is and invested in drilling/other. Money spent now is revenue over the next 5 years. I have no idea how much of each.
This quarter was bad because they got terrible prices for their commodities - less than they were expecting when they had been drilling and completing over the last 5 years. The $45/bbl they received for it this last quarter was not enough to fund last quarters drilling program which anticipates higher future pricing. They also spent money this quarter on drilling but not competing wells - many large shale/tight players have been taking this approach to gain share when prices rebound and delay putting oil on the market in depressed pricing environment. This shows up as a cost currently but will no recognize revenue until rates of return make sense for completion. This is a gamble that prices will indeed recover at some point and make that investment profitable.
Prices are poor - that is why they are competing with other companies on efficiency. That was on display in last quarters call.
I understand you pain here though - this has not been a fun time to be a share holder of CHK or almost any E&P stock.
Agreed - and so what if Tom chews out his equipment guys for supplying hard footballs. Does that make him a cheater? I dunno, it is both inconclusive like you said and also feels manufactured. NFL is the worst run sports league.
Hey hey hey!!! Back off my main man Tom Terrific. Comparing a short seller to TB12 is sacrilegious.