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SandRidge Energy, Inc. Message Board

rainbow3100 71 posts  |  Last Activity: Jul 11, 2014 5:31 PM Member since: Jul 1, 2010
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  • Reply to

    weather forecast about to change again...

    by truthfuldude Jul 11, 2014 9:46 AM
    rainbow3100 rainbow3100 Jul 11, 2014 5:31 PM Flag

    We burned 3.0tcf last year and ended up with 800bcf in storage. Injection into storage will likely end taking the figure up to between 3.4tcf and 3.5tcf this year before heading into winter. Severe pressure and deliverability problems will occur with anything under 600bcf in storage. There were some problems in that regard this winter.

    Cushion gas is the base amount that is needed in storage to allow adequate pressure and flows. There are numerous storage facilities thru out the country, so not all markets will be effected similarly. New England markets had some serious problems this winter with City Gate prices briefly rising to over $100/mcf.

    If next winter is as cold or colder than this past winter there will be horrendous problems and NG price will surge. Mexico exports ramp up hard next winter and lots of Coal Plants are retiring. In the mean time we are having a cool summer with demand kept in check and the erosion of NG prices. Its a fun and dynamic situation.

    Most of the stranded wells in the Marcellus that make economic sense to hookup should be hooked up by now. I don't think we are going to see supply go up much from here. UPL has a lot of acreage in the Marcellus - CEO Watford thinks Marcellus growth will slow, and although UPL is one of the lowest cost producers in the Marcellus, they are backing off the area in favor of different basins out west which have more favorable price differentials and higher liquids contents.

    More wells have been hooked up than drilled in the Marcellus by CHK, RRC, and UPL this past year. This is likely true for the rest of the players as well, though information is difficult to come by.

    There may be more downside pressure on NG if summer continues to be cool. Longer term NG is heading much higher - likely sometime between 2015 and 2017.

    If you look at Legacy Production in the Marcellus it shows some big problems with existing well production dropping at an accelerating rate. Contrary to what some say, additional rigs are not being added to the Marcellus in any appreciable way. In fact a lot of rigs have left the play, particularly on the dry side of it. And the wet side only produces around 70% of the methane compared to the dry side. NG rig count is extremely low and current rig count will not maintain production indefinitely.

    JMHO - do your own DD.

  • rainbow3100 rainbow3100 Jul 9, 2014 7:04 PM Flag

    USA NG will not get world market prices domestically. The gas will be delivered at world market prices to the end user. Europe trading in the 10 to 12 area, Asian markets in the 14 to 16 area.

    LNG exporters in the USA are pricing their contracts at HH prices plus a 10 to 15 percent markup for processing the gas.

    Processing and transport costs to European Markets are around 4mcf - Asian markets in the 6mcf area. Once Panama Canal is widened, transport to Asian markets will fall.

    Round numbers: US NG hits world market prices less 4 to 6mcf. This would equate to 6 to 10 depending on destination. There will be increased pressure on HH pricing. NG will head higher, but don't expect to see anything over 10 anytime soon.

  • Reply to

    100+ injection reported again tomorrow?

    by bi_kcgirl Jul 9, 2014 10:22 AM
    rainbow3100 rainbow3100 Jul 9, 2014 3:37 PM Flag

    Billy producers can hedge production out for years, but seldom do so for more than a year or two. Back in 2007 and 2008 some of the NG producers hedged out 3 years (as prices were high) most are only hedging out a year or less now. LINE hedges out further to give assurance to their dividend. UPL & SD have nothing hedged for 2015.

    Google Natural Gas Futures NYMEX and you will find various links to the futures markets and see monthly quotes going out for years.

  • rainbow3100 rainbow3100 Jul 8, 2014 9:37 PM Flag

    Wi1911, I sold 1/2 my position in SD at $11.32 when Watsa/Fairfax was selling (and got some flack from the longs at the time) - bought back in as low as 4.03 and have a current basis in the stock of 5.82. Have sold covered calls and traded the stock as well which add to profits. SD is by no means the best stock that I own, but fortunately I'm up in it.

    NG has been trading lower lately. Summer so far has been cool in TX (largest demand area for summer A/C). Weather always effects storage, supply, and pricing. My thesis is that sub 350 rigs will not maintain supply and that we will see at least 5.50 to 6.00 NG on the futures markets before rigs move back towards NG. This is going to happen sometime between 2015 and 2017 IMHO.

    Only 1.5bcfd of additional pipe getting laid in Marcellus between now and end of 2015. Mexico exports ramp up hard EOY. Many Coal and Nuclear Plants get retired next year. Industrial plant demand coming on hard in plastics, fertilizer and gas to liquids. The transport industry demand continues to grow. LNG exports hit EOY 2015 or Q1 2016.

    The long term price ratio of NG to Oil in the USA has been in the 10 to 1 ratio - with $100 oil, that would put NG at $10, EIA says NG is going to stay cheap forever. EIA blew their call on the Monterey Shale (Oil Reserves) by 96%, they are likely off on thinking that producers will pump NG at sub 10 to 1 ratios with oil as well.

    Marcellus production has been extremely impressive - it's the only thing keeping supply growing. However, it's nowhere near as massive as some think. Basically it just gets down to 6 to 8 counties with 4 to 6 Million acres in play - not the 60,000,000 acres EIA thinks it contains, at least not with NG under 6/mcf.

    Let's see how this plays out, I'm figuring NG takes a good hard run upwards between now and 2017: JMHO, do your own DD.

  • Bakken 1.225bcfd

    Eagle Ford 7.126bcfd (big uptick in the last year)

    Haynesville 6.890 bcfd (in decline for a couple of years but holding steady to slightly rising now).

    Marcellus 14.975bcfd - huge increases each year

    Niobrara 4.441bcfd (in decline for a couple of years but holding steady to slightly rising now)

    Permian 5.625bcfd (up about a Bcf in the last year).

    There have been a lot of new pipelines added in Eagle Ford and Marcellus in the past year. Most of the stranded or backlogged wells in the Marcellus that are economic should be hooked up by now. Eagle Ford has gotten a lot of pipe as well and seen the play shift from the gas side to the wet side. More pipe is scheduled for the Eagle Ford, but most of that is heading to Mexico. Marcellus will only get an additional 1.5 bcfd of pipe between now and the end of 2015.

    Legacy production in Marcellus is dropping hard, we will not see 3bcfd yearly growth in this field next year unless NG heads much higher.

    Eagle Ford NG supply growth has been impressive, it should slow significantly in the next year or two year with most of the excess supply going to Mexico.

    My thesis all along is we would see NG take off sometime between 2015 and 2017 - there are lots of moving parts, but demand is set to grow significantly during this time frame. Rig count of 350 or less will not satisfy this demand and more dry NG rigs aren't in the future unless NG moves much higher.

    It's been relatively cool in TX this June, once the Texas heat wave hits you can kiss those 100bcf weekly injections goodby.

    NG storage is 1.829tcf - need another 2.0tcf injected between now and November 1 to hit historic averages - close to 100bcf per week each and every week from now on. It simply will not happen. I'm figuring somewhere between 3.3 to 3.5tcf at present - we will have to see how hot it gets this summer. EIA has storage ending around 3.4tcf.

  • rainbow3100 rainbow3100 Jun 25, 2014 10:44 PM Flag

    The ultimate goal for ISIS is the southern Iraq Oil fields and perhaps onward into Kuwait. Taking control of the refinery will cripple Bagdhad. Bad things coming soon. Obama and the democrats will not launch another war until after elections in November this year and maybe not until Presidential elections in 2016. The renegade Muslims know this, and its likely they will play havoc during the interim.

    The Chinese, Indians, South Koreans, and Taiwan want Iraq oil and don't care who the master is. The USA took out Sadam Hussein two times: the first time when he invaded Kuwait, we didn't kill him then. Sadam got #$%$ at George H W Bush for kicking his #$%$ and driving him out of Kuwait which on some accounts is the property of Iraq. Sadam issued death threats for GHW Bush and the rest of the Bush family. Once George Junior became president, and after the 911 attacks, Junior decided to take out Sadam Hussein on the basis that Iraq was behind the 911 attacks and had weapons of m#$%$ destruction waiting to destroy the USA and its allies. We all know now that was a crock of BS and that the War in Iraq was a pathetic waste of Trillions of dollars and lives of our American Soldiers.

    I'm totally sick of the apathy that our American population has towards an Energy Policy, and the constant wars that we get involved with that do little to benefit our country. Vote out all of the incumbents during the primaries that don't have a sound Energy Policy platform. Start voting in those primaries, it could save our country if we get things turned around. If you can't get them out in the primaries take them out in the general election. You have a vote and it counts - use it.

  • Reply to

    Four Trillion Dollar Oil

    by rainbow3100 Jun 21, 2014 12:50 AM
    rainbow3100 rainbow3100 Jun 25, 2014 6:29 PM Flag

    Part II.

    In 2013, the USA imported 727,688,000 barrels of oil from the Mideast. Our War Machine, Military Personnel, and Military Bases cost us on average $400,000,000,000 yearly or nearly $550 per barrel over the past 10 years.

    The USA has Military Bases in Bahrain, Kuwait, Qatar, Saudi Arabia, United Arab Emirates, Egypt, and South Africa. In contrast: China, India, South Korea, and the rest of Asia have no Military Bases in the Middle East and are basically free loading off the USA War Machine.

    Predictions are that Asian markets will be consuming ninety percent of Mideast Oil in the not too distant future, yet they pay nothing to insure its supply. The USA will be consuming far less than 10 percent of Mideast Oil and may wean itself totally.

    Forbes posted a good article awhile back entitled: What happens when Americans no longer need Mideast Oil? Its a good read and I hope we sell our Military Bases to the Chinese and let them Police the area.

    The USA needs an Energy Policy. We have a Military Policy that needs to change, let's start spending $100 Billion Dollars a year on NG and renewables at home and let the Mideast rot - so sick of countless lives lost and Trillions of dollars going into this Cesspool. The humanitarian side trumps the economics, but the economics are strong. Why doesn't the USA have an Energy Policy based on home "grown" assets and get the Military Policy changed?

  • rainbow3100 by rainbow3100 Jun 21, 2014 12:50 AM Flag

    Part I

    Old T. Boone Pickens is always fun to watch, the guy is pretty sharp even at 86 years of age. An excerpt from one of his statements on Mideast Oil:

    It’s because America pays for our military to protect other countries’ supplies for them. We protect them so we – and other countries – can keep buying their oil. It’s a mission that has cost us more than $4 trillion protecting foreign oil over the past 10 years alone. That number, from a Princeton University study, matched with Energy Information Agency data, works out to be another $1 per gallon we’re paying for gasoline. If that were included on the pump indicator, you can bet things would change. But the price is hidden from you so you don’t know.

    Of the 17 million barrels of oil that are shipped out of the Persian Gulf on a daily basis, about 85 percent of it goes to Asian markets including China, Japan, and Korea. Only about 2.2 million barrels (13 percent) of that oil comes to the United States, yet we pay 100 percent of the costs of protecting the oil.

    The article quoted is a bit old, now we are only getting about 10% of our Oil from our "friendenemies" in the Mideast. Regardless, it's costing us at least $400,000,000,000 (that's billion not million) per year to maintain our military presence in the Mideast and we are just getting 10 to 15% of the exports and nobody else is paying their way.

    What is wrong with this country? Why don't we have an Energy Policy? Just 2 or 3 billion cut from the Mideast and redirected towards subsidizing the NATGASACT or something similar would screw the Arabs. Throw a couple of hundred billion at a good US energy policy, and we can let the Chinese Navy take control of the Mideast - we don't need Arab Oil, let's get Keystone pipeline done and deal with our neighbors.

  • Reply to

    113 build

    by chicosan3 Jun 19, 2014 10:31 AM
    rainbow3100 rainbow3100 Jun 20, 2014 10:59 PM Flag

    Interesting to see UPL basically abandoning the Marcellus. Shell, XOM, and many others have had little luck with shale gas at sub 6 prices.

    The 550 drill sites in the Uinta should keep UPL busy until NG and particularly Marcellus prices, which currently trade at a discount to HH come back.

    Glad to see you posting here Nikon - SD has been moving up nicely lately - US Oil & Gas producers are heading up.

    Kudos to Uplinvestor, Blackoil, and the rest of the good guys. I tried to get Chico straightened out a while back but it was like beating my head against a wall.

    Chico, check out my post on SD board on Coal Plants retiring in 2015, then look at UPL presentation on Nuke Plants under review. Boone Pickens and lots of others don't think even 350 NG rigs maintain current production, we are currently at 311 and Marcellus Legacy decline is really picking up.

    Chico will undoubtedly call me an ignorant spammer, but I have no problems debating him on NG if he can produce reasonable arguments.

    And Chico before you respond, pay attention to the fact that only another 1.5bcfd of pipe gets laid in the Marcellus between now and the end of 2015.

    Additionally did you guys see that Sempra Energy got FERC approval today? It's for 1.7bcfd and Cheniere is approved for 2.0bcfd. Sabine Pass starts to ramp up late 2015, Sempra probably not until 2019. So its hard to say exactly when the pendulum comes back into play. It swang way low on the short side to sub 2, and it may swing way high to the long side as well.

    Then throw in all of the new industrial plants: steel, fertilizer, gas to liquids and the transport sector. Anybody that thinks 350 NG rigs or sub 6 NG stacking up against 100 oil is going to maintain production, much less increase supply needs to get their head examined.

    Plus nobody is giving credit to Mexico exports - first wave hits late summer and ramps up hard in early 2015.

  • Reply to

    Coal Plants Retiring 2015

    by rainbow3100 Jun 18, 2014 9:03 PM
    rainbow3100 rainbow3100 Jun 19, 2014 4:26 PM Flag

    I read an article a while back about renewable energy and its numerous problems. The problem with wind is the vast amount of acreage required for generation. In order for wind to supply the planets energy growth needs (not replacing any fossil fuels at all) a land mass the size of Italy would have to be developed each year.

    Italy is roughly the same size as California, and a little less than half the size of Texas. Clearly wind is not a viable option on a massive scale. Additionally, there are numerous areas where the wind does not blow hard enough to justify the expense.

    Solar is much better. It only uses about 10% of the land mass as wind, but it has its problems as well. The "greenies" have blocked some Solar Plants due to birds getting fried as they fly thru reflective mirrors or get fooled into thinking the panels are water and try to land on them. And Solar is still a long ways off from being economic. Every source of energy has some sort of problem. I'm a nuclear hater, by far the worst environmental problem of them all.

  • Reply to


    by blackoilpeaking Jun 18, 2014 8:42 PM
    rainbow3100 rainbow3100 Jun 18, 2014 9:35 PM Flag

    Thanks for the link Blackoil. Further confirmation about my Middle East Oil worries - its a very volatile situation that could send us into a global recession. I'm taking some money off the board in stocks outside the Oil & Gas patch. It's something we all should be concerned about.

    The situation has spread from Syria to Iraq, and could envelop the entire Mideast. The USA does not need another war, and why our country has never developed an Energy Policy is beyond me. I'd far prefer to see NG developed as a widespread transport fuel (with government subsidies to get it going initially) and let the Arabs fight their own problems.

    The Trillion plus dollars that we have spent on our War Machine in the Mideast are a near total waste. A couple hundred billion on NG infrastructure for transport in the USA and we could tell OPEC to sell elsewhere and create energy independence in the USA.

    Exporting LNG is an insane waste of energy. The amount of money and energy it takes to Liquify and transport is ridiculous. Yet politics rule, and the fastest way to get NG prices up and to stay up is to export the commodity ASAP.

    This is going to end badly for the US consumer and industry within the next 3 to 5 years. And I think there is a good possibility NG moves up hard next year - weather is the short term variable. The longer term variables are plain as day - demand is increasing, CAPEX is not going to be deployed towards NG unless the price rises significantly, and Marcellus backlogs aren't going to be there indefinitely to add to supply.

  • rainbow3100 by rainbow3100 Jun 18, 2014 9:03 PM Flag

    The MATS act and the EPA are going to severely Kick Coal's Ass. Somewhere between 16GW and 28GW of Coal Plants are set to retire in 2015??? That is total insanity. The ratio is roughly 5 to 1 with NG on capacity, as in 15GW would equate to 3bcfd of extra NG demand.

    Renewables are set to get a big uptick in 2015, but not enough to offset even 16GW retirements. If Coal retires 28GW, lookout for severe curtailments of NG to Industry - residential consumers will not be allowed to freeze to death.

    Its tough to actually figure out the burn rate, as the plants do not run at full capacity year round, but even if NG just replaces 50% of the estimated 16 to 28 GW retirements, we are talking additional demand of 1.5 to 3.0bcfd. Plus Mexico exports ramp up hard in 2015 and very little new pipe in Marcellus in 2015. NG will likely head much higher in 2015, and it really needs to be moving up now to encourage drilling. If we get another cold winter, it's going to be devastating to industry that depends on NG and could trigger a recession.

    And Oil could really soar in short order if the situation in Iraq gets out of hand. Oil & Gas stocks should do well, not sure about other sectors. We are over due for a correction in the market and a crisis in the Middle East could set it off.

    A potential disaster in the making - $150 Oil - $10 NG - it is a situation that could easily unfold. It's not something I'm prophesying, but the elements of concern are present. I beefed up my cash position by 10% today and will likely increase cash position further - did not reduce Oil & Gas I stocks. JMHO, the market has had a good run.

    Rule number 1 don't lose money, Rule number 2 remember rule number 1. Stop loss orders are always a good idea.

  • Reply to


    by sj40mf Jun 16, 2014 11:03 PM
    rainbow3100 rainbow3100 Jun 17, 2014 7:30 PM Flag

    Both Bennett and Ward have stated that the WTO could get some action once NG is over 5. I don't think it stacks up to the returns on 100 plus oil, but OXY should be able to clean house in the WTO with 5 NG and the 50,000bod lift to their Permian production thru CO2 injections.

    If their is a reason to the recent rise in SD, it may have something to do with OXY taking an interest in the WTO. Getting rid of those yearly penalties and the disaster penalty at the end of the contract would propel SD upward in short order.

    NG is going much higher and perhaps sooner than most expect. We will be lucky to see 2.0tcf in storage by July 1, and 3.3tcf by November 1. Then in 2015 demand really picks up.

    NG stocks are still cheap. Long SD, UPL, ECA, RRC and SWN. Up nicely in all of them and feel like doubles are a realistic possibility in the next 3 years barring severe recession or a collapse in Oil prices. JMHO, do your own DD and don't rely on me or any other poster.

    US warships moving in on Iraq, Syria in turmoil, NG rig counts pathetically low. US Oil and Gas producers sure look like the way to go. And NG is still trading at over 20 to 1 with Oil when its historic ratio is 10 to 1, and the BTU is 6 to 1. The US Energy sector looks quite good right now, and the NG sector extremely good from a fundamentals standpoint. I just love the ever decreasing NG rig count in an increasing demand environment.

    The NG Bull Market is alive and well!

  • Reply to


    by sj40mf Jun 16, 2014 11:03 PM
    rainbow3100 rainbow3100 Jun 17, 2014 5:04 PM Flag

    Pinon is 30 miles south of Fort Stockton. Big Canyon is approximately 45 miles southeast of Fort Stockton. SD typically drilled down no deeper than 8,000 feet and had 4 different pay zones: Dimple, Tesnus, Caballos I and Caballos II.

    There are upper and lower Wolfcamp formations in the WTO. I don't believe SD had much success in the upper Wolfcamp, and don't know if they tested the lower Wolfcamp as it is substantially deeper, also there is the Ellenburger which is even deeper. Riata did find at least one decent Wolfcamp Oil well.

    Google West Texas Overthrust Wolfcamp, and West Texas Overthrust Longfellow ranch for more information. There is some oil in this area, but it appears to be sporadic.

  • Reply to


    by sj40mf Jun 16, 2014 11:03 PM
    rainbow3100 rainbow3100 Jun 17, 2014 12:51 PM Flag

    SD bought the Big Canyon ranch for $70,000,000 and has yet to produce a single mcf of gas from it. There was a good well drilled on it and another 2 good wells drilled on ranches to the east of the Big Canyon (which is also east of the Pinon Field). There is likely 5tcf of gas or more in these fields and it's predominantly methane (not high CO2 like Pinon).

    The Big Canyon is a different ranch than the Longfellow Ranch. Nobody other than OXY would buy the WTO unless NG prices were much higher. The penalties are in the 35 to 40 million area per year, with a horrendous penalty at the end of the contract, if production does not ramp up hard - as in 20 rigs running full time.

    These fields east of the Pinon do not have pipelines - it would cost somewhere around 10 to 15 million to get a good pipeline network setup and with low NG prices, the company has put this area on hold and let a number of their leases expire.

    The 2,000 per acre that SD paid for the Big Canyon Ranch was around 5 times the going rate. Most if not all comparable sales where for $400 per acre or less - but the gas is there, and that is why SD paid so dearly for this ranch. At the time, gas prices where higher and it looked like a great deal. SD got the minerals with the deal, so no problems with lease expirations on the Big Canyon Ranch.

  • Reply to

    Poor Bears

    by rainbow3100 Jun 16, 2014 9:45 PM
    rainbow3100 rainbow3100 Jun 17, 2014 12:46 PM Flag

    Storage is 1.6tcf as of June 6 around 800bcf injections for the first 10 weeks - average of 80bcf per week. Another 20 weeks of injection season at 80bcf takes storage to 3.2tcf. Typically about 1/2 of injections occur in the 2nd quarter. If we get another 3 100bcf injection weeks, that puts storage around 1.95tcf on July 1 - or a little under 1.2tcf injected. If another 2.0tcf gets injected it takes storage only to 3.2tcf - very bullish for NG.

    First Enercast has it at 3.34tcf, Bentek at 3.3, EIA at 3.4tcf. A hot summer and a couple of hurricanes and we end up at 3.0tcf. Shorting NG is a dangerous game - maybe El Niño comes into play, in such case the Bears might do well.

  • rainbow3100 by rainbow3100 Jun 16, 2014 9:45 PM Flag

    Don't fight the trend guys. NG is in a long term Bull Market. It spiked last winter and got severely pulled back on expectations that the Polar Vortex was an anomaly - and it was an anomaly.

    What is not an anomaly is that supplies are not refilling rapidly enough, rig counts are not sufficient to even maintain current production, much less provide for the enormous increase in demand coming up next year and further out. The only glue holding supply up now is all of the backlogs that have recently come online in the Marcellus.

    Speaking of the Marcellus, pay attention to the Legacy decline figures - they are accelerating. Not here to tell anybody how to trade, I'm out of the ETF's for now, and there may be some short term opportunities to short NG, but the long term trend is up and is going to stay that way for quite some time barring severe recession or a collapse in Oil.

    Coal stockpiles where severely depleted last winter, some of the plants may not be able to switch over thru out the summer regardless if NG spikes - they need to have reserves in the tank come winter.

    Bentec has storage ending up at 3.3tcf - it needs to be 3.8tcf plus. Mexico exports ramp up hard in December or January - at least 1bcfd extra demand in 2015 with some of it hitting late summer.

    Fundamentals rule, charts follow the fundamentals - the hard part is to figure out what the fundamentals amount too. IMO, the NG fundamentals for producing on a wide scale basis below 6mcf are pathetic - that means the price will rise to above 6mcf.

    Bears are going to get clobbered in the next couple of years and they have already gotten trounced on just the first couple of go rounds - it's only going to get worse. I wish nobody I'll, but but the only argument that the Bears have is the increased efficiency of the rigs that are currently drilling for NG. That is a good but short lived argument - 1 to 2 mile laterals chew up a lot of acreage in short order. The Marcellus is the only pl

  • Reply to

    NG Rig Count

    by rainbow3100 Jun 6, 2014 5:16 PM
    rainbow3100 rainbow3100 Jun 8, 2014 4:06 PM Flag

    Bentek just revised storage estimate down to 3.3tcf - Very Bullish number.

  • Reply to

    Ten Reasons For $10.00 NG

    by rainbow3100 Jun 7, 2014 10:20 PM
    rainbow3100 rainbow3100 Jun 8, 2014 3:56 PM Flag

    Good point Billy, there is money to be made on both sides of the trade. I'm a Bull and long via numerous NG stocks. Did well in UGAZ this winter, but am out of the ETF game at present. Hope you do well with your DGAZ, a short term drop in NG prices is certainly a possibility, but the long term trend is up.

    Bentek Energy in Colorado just said Tuesday it revised down its projection for how much natural gas will be in stockpiles by Nov. 1, down to 3.3 trillion cubic feet. That is 500 billion cubic feet below the five-year average. At that low a level, a severe winter could cause a supply crunch and price spikes as they did during the “polar vortex” of this past winter, according to the bulls.

    EIA still has storage at 3.4tcf, they will likely reduce estimates soon. A level of 3.3tcf should be considered very bullish as we burned 3.0tcf this winter. There will be much more NG demand in 2015 barring a severe recession or warm winter.

  • rainbow3100 by rainbow3100 Jun 7, 2014 10:20 PM Flag

    1. NG has historically traded at a 10 to 1 Ratio with Oil.

    2. Barnett Shale and Haynessville Shale are in decline.

    3. Marcellus is for the most part only getting drilled on the wet side of the play which generates less than 70 percent of Methane than the Dry Side.

    4. Marcellus Legacy Wells are experiencing high declines.

    5. Only an additional 1.5bcfd of pipeline capacity will be added to the Marcellus/Utica between now and the end of 2015.

    6. There is a 9 to 12 month backlog for new rigs, so even if NG spikes, it will take time to bring back the rigs.

    7. Mexico exports ramp up by 1.0bcfd by EOY heading up to 2.0bcfd thereafter.

    8. First train of Sabine Pass LNG export hits late 2015 of 1bcfd - second train of another 1bcfd within a year. Much more LNG exports from various other plants likely thereafter. NG trades as high as 16mcf in Asian markets and the Panama Canal is getting widened to let the Super Tankers thru (much lower transport costs on the Super Tankers).

    9. Obama and the EPA are killing the Coal industry in the USA - at least another 3bcfd in extra NG demand coming up soon.

    10. Industrial demand is picking up from fertilizer, steel, NG to liquids as well as a steady build from the transport sector - at least another 2bcfd of demand.

    NG is heading much higher, how soon remains to be determined, but it's going to happen. Bears need to fold their hands, they have been solidly defeated in the last 18 months, and it's just going to get worse.

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