last summer the Coal plants were working at normal pace, and when summer hit, more of them were in service to be turned up to help meet power demand. This year, they won't fill that role, so the pull of gas from storage will occur instead. Is the market prepared for NatGas inventory DRAWS in July/August?? I doubt it, and the analysts will freak.
i made more than double with PWE, which was in similar debt crunch. they announced a acreage sale, which wiped out more than half of the debt and the stock hasn't slowed down yet. I hope CHK plays out about the same way. Plot 3 and 6 months of SWN vs. CHK and see where we should be with some BK worry off the table.
winter gas prices are above $3.25 now, and rising by 10-12 cents/week.
Winter futures prices are climbing about 10-12 cents per week. Nobody can assure a cold winter, but if inventory trend stays favorable, we might be in a position to hit bottom on storage gas by next spring. New Shale wells can't be ramped up enough to prevent that outcome if the Ground Hog cooperates.
if only half the shorts are that stupid, they may not cover quickly and keep the panic momentum going up and up. Winter Gas prices are getting up into decent profitable range.
back a couple of years before the Shale Gas was ramping up so strong, the NatGAs inventory values just flat lined in mid summer during peak A/C season. That would freak the market out if we had a couple of net draws when we have forgotten that would be normal.
Coal use for power production dropped off when NatGas price dropped below $3. That price is just about to cross back over. Look for Coal inventories at Power plants to drop back to normal range any time now.
now would be a good time. They have been acting as if the valley didn't truly exist. just looking forward to the next cliff. Those next two phases of SAGD should be steaming soon. It costs them next to nothing right now for the NatGas to produce the oil.
The website still shows 25% of the stock is shorted? I assume these sharp downdrafts are people shorting more, not taking profits. The price of forward gas keeps going up, and the inventory build this year is slower than prior years. $2 gas is not drill able . Tight Shale gas production has peaked, and drilling rigs are mostly idle. the stock should rise along with profitability prospects. Glad they can sell property rather than get crosswise with the lenders.
inventory report. problem is the Sept gas crack is still under $15/bbl, so after costs, they are barely making any money. And then demand slows from there. Not much to like at the moment. Maybe pick it back up in the low teens this winter and hope for better supply demand .
Antero has a whole lot of its production hedged at a rather high price. I don't see how any incremental production will be covered by the hedge. They must plan to have market pricing be high enough to more than cover the development cost at the time they will drill these wells.
lots more revenue coming. Q1 realized pricing was around $1.5, or about 0.65$ below Henry Hub. HH is up about $0.50 since mid Q1 and Next Winter pricing is a buck above that. So at constant dry gas production, the revenue is going to about double yoy. That should put them back with proper funding for expansion, debt reduction, and maybe dividends at some point.
Well we know SWN owns heart of the field. they weren't planning to drill it for years, so it can't be worth half per acre as the best, ready to drill next stuff.
CHK p;urshase was for whole field, good, bad and ugly. So Antero offering was a less desirable slice. so, not much inference. Pricing difference seems positive if anything.
Nat Gas on the forward exchange is selling for over $3 for the months of Oct-MAr '17. That should work its way into SWN earnings estimates.
You may be correct. I like the supply demand situation, where vast amounts of fertilizer has to come to North America from Asia, and the cost of transporting that is only going to get higher as crude returns to market prices. Also, the Chinese Government might ( Should) stop all this coal burning that poisons the air. Without incremental coal use, they would not be able to make ammonia for export. If it were a western country, they would not be killing their [people with dirty air, to make cheap fertilizer for US farmers to grow more corn and soybeans. If that stopped, the margin on US ammonia production would take its premium value based on access to some of the cheapest Natural Gas in the world.