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SandRidge Energy, Inc. Message Board

rainbow3100 74 posts  |  Last Activity: Jul 22, 2014 8:50 PM Member since: Jul 1, 2010
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  • rainbow3100 rainbow3100 May 1, 2014 4:24 PM Flag

    5 year high + 95 (2009)
    5 year low + 28 (2012)

    This injection is well above the 5 year average but was significantly influenced by the Easter factor since many businesses were closed.

    Next week should be lower.

  • rainbow3100 rainbow3100 May 1, 2014 6:06 PM Flag

    Over 100bcf per week every week from now thru October. It simply will not happen. We will get a few 100bcf plus weeks later this month and high injections heading into June. July and August will have lower injections, then injections pick back up in September. Forecasts are for 3.4tcf in storage vs 3.8tcf average. I think 3.4tcf will be tough to hit, but weather and other variables play a factor.

  • Reply to

    Nat gas build of +82

    by retiredgm65 May 1, 2014 10:59 AM
    rainbow3100 rainbow3100 May 1, 2014 9:25 PM Flag

    NG sector is heading much higher. The 1300 stranded wells in the Marcellus are by and large out of play. Many of them where exploratory and not in the sweet spots.

    Next weeks injection will be lower than this weeks and it's going to be very difficult to get to even 3.4tcf. Backside of curve is starting to evolve but still needs to move towards 5.50 to 6.0 before rigs move back in.

    And the rigs aren't even available if you want them. The Oil fields have gobbled up the supply. With a 9 to 12 month delay on getting rigs for NG fields it will exaberacthe the situation.

    My NG projections are starting to look low if rig count can't increase significantly. And who is going to buy or lease a new rig when NG is at 5 and Oil at 100 and deploy it for NG?

    The futures markets need to move hard and fast or we are going to be facing some serious problems in the next couple of years.

    Don't hedge 2015, the party is just starting.

  • Reply to

    Added to UPL

    by bqdoo May 2, 2014 7:40 AM
    rainbow3100 rainbow3100 May 2, 2014 5:45 PM Flag

    UPL's forward P/E is quite low. Of key note is that Debt to EBITDA is forecast to decrease to a 2.2 ratio. Wall Street hates over leveraged E&P companies, but 2.2 is a very safe number. Not only will earnings be increasing, but I think there is a good chance that the P/E ratio gets better as well.

    This stock is set to move much higher, perhaps dramatically so if NG prices continue to accelerate.

  • Reply to

    Nat gas build of +82

    by retiredgm65 May 1, 2014 10:59 AM
    rainbow3100 rainbow3100 May 3, 2014 1:00 AM Flag

    InDebt,

    1. Eight buck NG takes all of SD problems away - even 6 bucks does the trick if it can be hedged out for several years. The EUR's in those Pinon wells are in the 6 to 8 Bcf area, albeit most of it is CO2 but they can drill the wells at less than 2 million.

    But if the wells only contain 17% methane capture, its an entirely different story. From what I know about the Pinon, it contains somewhere around 40% methane. This includes both of the Caballos formations, the Tesnus formation, and the Dimple formation.

    Where are you getting just a 17% methane figure?

    With EUR's in the 6 to 8 Bcf area, the wells will be very profitable at 8 NG if methane is in the 40% area.

    2. At least 20 rigs would need to be deployed continuously, perhaps more initially to ramp up production.

    3. The OXY contract is for 30 years. There are heavy penalties for under delivery each year and disaster penalties at the end of the contract if SD does not meet their obligations. Its a long ways off on the 30 year penalty, but it is looming. SD isn't just getting hit with under delivery penalties to OXY at present, but is also getting whacked for pipeline delivery penalties as well - to the tune of $40,000,000 or more per year.

    4. I don't know if OXY would be penalized for not processing the gas if SD delivered it and had to route it to a different processing plant. Good question, but OXY absolutely cleans up on the CO2 injections in the Permian, and unless Oil where to seriously tank, I doubt OXY would refuse to process it. OXY can pull an extra 50,000 boed from the Permian if the plant is running close to capacity.

    NG is definitely heading higher. SD will takeoff like crazy if they can sell the WTO to OXY, and I expect some type of a deal to go down in the WTO before too long. There is some interest picking up on leasing activity on the east side of the play which is high methane. SD shot 750,000 acres of seismic out there but has let most of their acreage expire. The WTO is good and SD's seismic is worth a bunch, probably 75,000,000 or so, but NG prices need to rise.

    I'm going to work up a post on the rise and fall of the Marcellus - stay tuned.

    You guys know I'm an NG Bull, what I'm seeing in the Marcellus will blow you away. Get in on the low priced producers while you still can and DIVERSIFY.

    Long SD, RRC, UPL, SWN, and ECA.

    JMHO, and do your own DD, but have I missed the call so far?

  • Some say Marcellus production will soon rise to 20bcfd.

    The Marcellus covers over 60 Million acres.

    Let's look into this deeper: Pennsylvania is the heart of the play. There is very little activity outside of PA.

    Only 8 counties make sense to drill at 5 NG in PA:

    Dry Gas Counties:

    Susquehanna - 532,000 acres

    Bradford - 743,000 acres

    Lycoming - 797,160 acres

    Wyoming - 259,200 acres

    Around 2,300,000 acres in the sweet spots in the dry play

    Wet Counties:

    Fayette - 510,720 acres

    Greene - 370,560 acres

    Washington - 551,040 acres

    Westmoreland - 663,040 acres.

    Around 2,100,000 acres in the wet area.

    Total area in the sweet spot is 4,400,000 acres. That is a far cry from 90,000,000 acres that the EIA tells us about. There is very little activity in the Marcellus outside of the state of Pennsylvania.

    Around 7% of the play makes sense with NG at current strip, and perhaps as low as 3.5% if you consider that the liquids side is where the focus is at present.

    All of the majors have lost their tails drilling for dry gas in the USA. Even UPL and ECA (two of the lowest cost producers) are shifting towards liquids and have limited interest in the Marcellus. CHK is going for liquids as well and the top 40 NG producers are showing declining NG production according to NGSA.

    More wells are being hooked up in the Marcellus than are being drilled.

    Legacy decline is getting close to 50% of current flow.

    The Marcellus will fall just like the rest of the NG fields if pricing does not increase significantly. This is going to play out sometime between 2015 and 2017.

    The NG Bull Market is here to stay. CA hydro production is going be down close to a bcfd in NG for the next few months.

  • Reply to

    New EIA short term outlook numbers

    by retiredgm65 May 6, 2014 1:43 PM
    rainbow3100 rainbow3100 May 6, 2014 6:53 PM Flag

    Marcellus legacy decline is really picking up or tanking if you will. Last year at this time, the decline rate was 200mmcfd, now it's up to 352mmcfd. Granted production has increased substantially during this time frame, but the field is not growing production as fast as it has in the past.

    "In its latest April/May 2014 shale gas productivity report, the Energy Information Agency’s (EIA) now projects the Marcellus shale formation will lose an estimated 352 million cubic feet per day (Mmcf/d) of shale gas production from legacy wells for May 2014. The EIA report shows well productivity daily losses increasing from 200 Mmcf/d since May 2013. The agency estimates a gain in production from new or recently connected Marcellus shale gas wells of 605 Mmcf/d but only a net gain of 256 Mmcf/d after production losses from legacy wells. Total daily shale gas production in the Marcellus is estimated by the EIA to reach 14,772 MMcf/d for May"

    At this rate, legacy decline will takeover new production within 18 months and perhaps sooner as more wells have been completed than drilled and the focus is squarely on the wet side which has significantly less volumes of methane.

    Look to see more upward revisions for NG pricing in the next quarter or so. Numerous 100+ Bcf weekly injections are needed soon or NG is going to move up hard. We will see several big injections starting in 2 to 3 weeks and continuing thru June to perhaps early July. At that point the stage wilI be set, and we will have a good grasp for where things are heading. I think it's going to be tough to get reserves back up to above 3.4tcf.

    If we average 100bcf per week from now thru June and 80bcf per week thereafter, it only gets storage to around 3.2tcf. Many of the stranded wells on the dry side of the play may not get hooked up anytime soon as producers have moved away and don't want to commit to pipeline contracts in today's lower priced environment.

    So far during the injection season we are running at about the average pace of 2.0tcf which if it continues would leave us at around 2.8tcf going into next winter and we burned 3.0tcf this winter.

    The EIA has missed the call many times in the past, both high and low. And with 323 rigs drilling for gas, its tough to believe that overall supply is going to grow much, if at all after the backlogs are worked thru.

  • Reply to

    New EIA short term outlook numbers

    by retiredgm65 May 6, 2014 1:43 PM
    rainbow3100 rainbow3100 May 6, 2014 10:38 PM Flag

    The NGL or liquids side of the Marcellus produces somewhere around 65% methane. Even on the dry side there are liquids that have been integrated into the flow. Many new cracker plants have been and continue to be developed, plus a lot of this gas is soon to head south towards the gulf where separation plants abound. New wells will not produce methane in the same quantity as previous wells drilled on the dry side.

    Methane/NG will soon be in short supply. Historically it's traded at 10 to 1 with oil, and while the pendulum often swings wide or at least some of the time swings wide it always returns to the norm. The same technologies that brought NG supplies up are now being deployed for Oil. Notably in the Bakken and Eagle Ford which will likely face similar legacy decline problems that are currently facing the Marcellus in a few years.

    Associated gas will decline accordingly and it's largely overblown IMO.

    Mexico exports start to ramp up by 1 to 2 bcfd in December if all goes according to plan. Canadian imports are at 19 year lows and they face storage problems equal or worse to ours. Hydro generation is way off in California leading to more demand for NG. Then the first LNG export terminal hits in late 2015.

    Yet the EIA has these Rosy forecasts that NG is going to be cheap for decades. They are out of their minds, particularly if Oil stays in the 100 area. The current NG rig count is a joke - we were running 1600 rigs not long ago which obviously was too high and led to the demise.

    All of the majors have curtailed NG development in the USA. CHK, ECA, and other strong minors are out or seriously curtailing for now. There are a select few that have highly productive acreage in the Marcellus (COG, RRC, SWN) and a few like UPL in other fields like the Pinedale that make sense. ECA and CHK are still drilling a bit in the Haynessville but the rig count there has decreased from 186 to around 25 and most of the new wells don't compare to the wells of old unless they run the laterals much longer and increase the frack stages substantially - very expensive to drill.

    The situation is stupid simple. NG prices must rise or Oil must fall. Even if Oil falls its doubtful that we see much CAPEX dedicated towards NG until it hits that 5.50 to 6.00 area that I have been talking about for awhile. With 100 Oil that threshold is likely higher.

    Let's watch the storage build over the next two months. A number of analysts think we have up to 3bcfd of extra supply coming online soon. They thought that a month ago as well, but so far the injection numbers aren't reflecting it - demand is way up, Canadian imports down, CA hydro production in trouble, continuous retirement of Coal Plants- lots of moving parts.

    The NG Bull Market is alive and well. JMHO, do your own DD - the EIA, your government sponsored analyst thinks differently. And pay attention to those Legacy Well declines.

  • Reply to

    This Time The Street Will Take Notice

    by cm199178 May 7, 2014 8:11 PM
    rainbow3100 rainbow3100 May 7, 2014 9:39 PM Flag

    Great quarter, even with the bad weather. The well economics are getting much better on both sides: higher IPO's and lower drilling costs. NG is holding well when normally it tanks this time of year.

    Tomorrow's injection number should be around 74bcf. CA is getting hit with a record heat wave. I'm seeing future injection forecasts all over the board - some with 100bcf coming up soon. We need multiple 100bcf injections or storage will be at critical levels next winter.

    ECA up nicely on their oil purchase in the Eagle ford. None of the majors or semi-majors heading back towards dry gas soon. That 5.50 to 6.0 NG area will likely be here by next winter across the board in the futures market, and it may head higher than that if Oil holds in the 100 area.

    In the mean time lets hope NG stays relatively low and that FERC approves all of the pending applications. Forward 2017 to 2018 and NG trades at global market rates less processing and transportation - in the 8 to 10 area which is pretty much back in line with the historic 10 to 1 ratio which would put it close to 10 now.

    Load up on the NG stocks, the Bull Market has just begun IMO.

  • Reply to

    just covered my 35 sept 30 calls

    by chicosan3 May 15, 2014 10:30 AM
    rainbow3100 rainbow3100 May 15, 2014 3:12 PM Flag

    Chico I had it at 74bcf last week and around 100 this week. See my May 7 post, hit last weeks figure right on the nose.

    Next week I have it at 99 with the following 3 weeks likely over 100bcf, declining slowly thereafter. We are running around 2 to 3 bcfd loose compared to last year. If that continues, there will be a 525bcf increase in injections vs last year putting us at around 3.4tcf on the high side heading into next winter.

    A different way to look at this is in order to reach 3.4 tcf we need to have average injections of 89.6bcf per week for the remaining 25 weeks of injection season. That seems unlikely unless we get some monster injections soon and/or an abnormally cool summer. And 3.4 is hardly a comfortable level considering the 5 year average is 3.8tcf. Mexico exports ramp up significantly in December if pipelines get completed on time, an additional 1 to 2 bcfd of demand.

  • Reply to

    Rainbow - new UPL prezo

    by bqdoo May 14, 2014 10:46 PM
    rainbow3100 rainbow3100 May 15, 2014 4:23 PM Flag

    There are going to be some seriously large injections coming up in the next 6 to 8 weeks. Let's look into this a bit further:

    Long term injections forecasts according to First Enercast on a weekly basis:

    74 - 05/01 actual
    105 - 05/08 actual
    93 - 05/15 projected
    100 - 05/22 projected
    107 - 05/29 - projected
    97 - 06/05 projected
    93 - 06/12
    94 - 06/19
    87 - 06/26
    91 - 07/03
    88 - 07/10
    73 - 07/17
    64 - 07/24
    63 - 07/31
    62 - 08/07
    66 - 08/14
    67 - 08/21
    73 - 08/28
    91 - 09/04
    83 - 09/11
    84 - 09/18
    84 - 09/25
    82 - 10/02
    76 - 10/09
    71 - 10/16
    54 - 10/23
    42 - 10/30
    14 - 11/06

    This leaves storage at 3.159 tcf going into next winter. EIA and others say 3.4 tcf area. I'm figuring somewhere in between, weather will dictate much of this. Very bullish for NG under either scenario, and once Mexico exports ramp up NG should really take off.

  • Reply to

    Rainbow - new UPL prezo

    by bqdoo May 14, 2014 10:46 PM
    rainbow3100 rainbow3100 May 15, 2014 8:17 PM Flag

    Anything below 3.2tcf heading into winter and NG goes nuts. Burned 3.0tcf this winter, had some severe deliverability in a number of markets with city gate prices spiking to over 100mcf.

    Pressure and deliverability become severe with 600bcf in storage. Mexico is going to put a strain on supply, and there is no way that 323 Rigs will maintain supply indefinitely. Marcellus is getting top heavy with more wells being completed than drilled, and Legacy production on the older wells are creeping up hard.

    The NG Bull Market is alive and healthy. We may see a little downdraft over the next few weeks, but the long term trend is upwards and it's going to stay that way for awhile. That 5.50 to 6.00 area that I've been talking about needs to happen across the board in the futures market or the rigs aren't coming back. It may have to move higher than that if Oil stays in the 100 area.

  • Reply to

    todays data perspective

    by eskimo_pie22 May 15, 2014 9:43 PM
    rainbow3100 rainbow3100 May 15, 2014 10:19 PM Flag

    Lots of hookups got delayed because of the extreme cold this winter. Many have recently come online. We are running somewhere around 2.5 to 3.0bcfd loose now compared to last year. At 3.0bcfd loose, we hit close to 3.4 tcf in storage going into winter.

    Marcellus Legacy Production is really starting to fall off and far more wells are being completed in it than getting drilled. With a normal summer we might get to 3.4tcf heading into winter - average build is around 3.8tcf. Mexico exports start to come on strong in December if pipelines get completed according to plans - an extra 1 to 2 bcfd demand coming from Mexico. At 3.4tcf, and with tremendous demand growth from numerous sectors, NG will likely head higher next winter forward if not before.

  • Reply to

    Mexico Exports

    by rainbow3100 Mar 12, 2014 3:15 PM
    rainbow3100 rainbow3100 May 16, 2014 12:45 AM Flag

    This post needed a bump. The futures market has not taken in the Mexico export factor into play. And Injections so far are not impressive. We may not get to 3.4tcf by next winter and then Mexico exports hit hard.

    Marcellus Legacy production is dropping like a rock and more wells are getting hooked up than drilled.

    At least another 2bcfd of demand hits in 2015 (from various sectors) and with a rig count of 323 there is no way that supply is going to increase. There is a 9 to 12 month lag on getting new rigs positioned - February to May of next year before its feasible to get significant numbers of new rigs drilling for dry gas.

    Disaster is coming if next winter is cold. I've been saying all along this was going to happen sometime between 2015 and 2017. Looks like it will be occurring a little bit earlier now. We need a bunch of 120bcf plus weekly injections soon or its going to hit by next winter. Maybe the big pipeline connections in the Marcellus in September forestall this for a bit, but it's going to happen if NG doesn't move up hard and soon. The longer NG stays low with pathetically low rig counts, the higher it's going to spike.

  • Reply to

    todays data perspective

    by eskimo_pie22 May 15, 2014 9:43 PM
    rainbow3100 rainbow3100 May 16, 2014 4:18 PM Flag

    The EIA monthly drilling report is an excellent source of information. The legacy decline vs. new well production is of particular interest. For example, back in December new wells added 612mmcfd in production and decline of legacy wells was
    193mmcfd. This month's report showed new wells adding 622mmcfd with legacy well decline increasing to an astounding 368mmcfd.

    CHK, UPL, and RRC have all addressed the number of completions being greater than the number of new wells getting drilled in various CC's and reports, I spoke with RRC's IR department and they confirmed this as well, though RRC is planning to ramp up production significantly in the Marcellus. That is not the case with CHK, UPL, SHELL and many others.

    Marcellus production is currently at 14bcfd according to the EIA website and I expect it to continue to grow for another 18 months or so, just not at as rapid of pace as in the past unless NG prices really take off. RRC and others are having pipeline problems in PA as there are no eminent domain laws whereby they can force a landowner to accept a market value for easements across the land in order to get the product to market. Its a big problem, the landowner can pretty much name any price.

    First Enercast is another excellent source, particularly their blog on Natural Gas Futures and Options. There are some professional traders on it that exchange a lot of useful information. Bill Powers1970 is good on Twitter and he has written a book called Cold Hungry And In The Dark that gets into some in depth analysis of shale gas that you might want to read.

    There are numerous sources for the Mexico exports. Just google it and dig a bit. Mexico exports are a big deal and if Marcellus continues to slow down supply and demand will get out of whack soon. More Coal Plant retirements, serious hydro problems in CA, Canadian imports way down (they have a serious storage problem as well), industrial demand building, LNG exports coming up in 2015, and the transport industry is slowly building demand.

    I see no way that 323 rigs drilling for NG will satisfy this increase in demand. Rigs won't move back appreciably unless NG price goes up a bunch.

  • Reply to

    todays data perspective

    by eskimo_pie22 May 15, 2014 9:43 PM
    rainbow3100 rainbow3100 May 16, 2014 4:27 PM Flag

    New wells are defined as wells that have been producing for less than 1 year, legacy wells have been producing for 1 year or longer. It's an alarming trend on the significant decline of legacy production, particularly if you believe more wells have been hooked up than drilled in the last 6 to 9 months.

  • Reply to

    todays data perspective

    by eskimo_pie22 May 15, 2014 9:43 PM
    rainbow3100 rainbow3100 May 16, 2014 10:28 PM Flag

    Compressa, good point on things not always going according to plans. Less than a decade ago, the USA was facing massive NG supply problems, a dozen or more LNG import facilities where built for multi-billions of dollars. Shareholders in these companies were expecting good returns, but it didn't pan out.

    Old Carl Malone figured out how to develop hydraulic fracturing and horizontal drilling in the NG shale plays and the market tanked seriously in 2008 as a result of his genius and has yet to recover.

    But there is a silver lining in this cloud: all of those import facilities can be converted at vastly lower costs to export facilities than building a new LNG export facility from scratch.

    Other countries may have NG, but it's not just as simple as drilling a well and all of the sudden consumers get hooked up. The USA has been steadily building its infrastructure of pipelines, compressor stations, seperation/cracker plants for decades 100's of Billions have been spent.

    Additionally, most of the onshore development has occurred on private lands where landowners (mineral owners actually) welcome the development of the resource. This is in stark contrast to many European and other countries where the state owns the minerals and property owners get nothing - nobody wants fracking unless they get a slice of the pie.

    Historically NG has traded at 10 to 1 with Oil in the USA. THE BTU equivalent is 6 to 1 - meaning NG at 10 to 15 or so would make sense. For the most part NG is a lot cheaper to produce, transport and refine than Oil in the USA, so that's why it's typically only traded at a 10 to 1 ratio - now trading at around a 25 to 1 ratio which is insane.

    Us NG bulls don't want anybody to freeze to death, industry supply will be curtailed if we get serious residential delivery problems in the next few years. Industry got some serious curtailments in the northeast this winter when city gate prices hit 100mcf. That was just the first wave. Maybe El Niño kicks in and we have a cool end to summer and a warm winter, all it will do is kick the problem out a little further. Rig counts simply aren't there to continue building NG supplies indefinitely.

    Watch that Marcellus legacy decline closely, I'm surprised more of the analysts aren't getting on top of it, although Seeking Alpha did run a good article on it a few months ago.

    JMHO, and I always welcome intelligent debate.

  • Reply to

    spammers

    by chicosan3 May 15, 2014 10:05 PM
    rainbow3100 rainbow3100 May 18, 2014 6:06 PM Flag

    Chico, you must be doing common core math.

    Current production around 67bcfd X 365 = 24,455 Bcf or close to 25 tcf for annual production. Three trillion Bcf is what you stated? Laughable, your figure is 3.0 to the 19th power.

    That is 30,000,000,000,000,000,000 in production you state vs. 24,455,000,000 actual production at current flow rates.

    I have no problems if you disagree with my statements, but your math sure needs some work. We will not be producing quintillions of NG now or ever.

    LOL, I've seen some pretty stupid posts and math errors in the past, but this one takes the cake - an error in the Quintillions!

  • Reply to

    spammers

    by chicosan3 May 15, 2014 10:05 PM
    rainbow3100 rainbow3100 May 18, 2014 6:30 PM Flag

    And Chico,

    You seem to have a problem conceptualizing numbers. A quintillion is an extremely large number. There are an estimated 7.5 Quintillion of grains of sand on all of the beaches in the world. Yet you state that the USA will produce 20 Quintillion of NG in just one year. ROFLLMAO!

  • Reply to

    todays data perspective

    by eskimo_pie22 May 15, 2014 9:43 PM
    rainbow3100 rainbow3100 May 18, 2014 11:09 PM Flag

    So far only Cheniere Energy has LNG approval and it doesn't come online until 2015, takeaway is contracted Henry Hub plus a margin of 10 to 15 percent for processing the gas. The receiving party is responsible for buying and shipping the NG - no exposure to market. They can't lose.

    NG could hit 15 in the USA and they still get paid. Banks aren't going to finance these projects unless there is Very minimal downside risk.

    Even if all of the pending plant applications get approved by the EIA and FERC, they will not move forward until risk is minimized on the 10's of Billions of necessary investment to develop these projects. The plants will not be built unless there are fail safe contracts for 20 years out.

    I'd far prefer to see our NG stay at home here in the USA: get after the NATGASACT or something similar and get the 18 wheelers off burning Diesel, get the Rail Locomotives heading in this direction as well.

    There is a big net energy loss involved in liquification, transport, heating the gas back up and sending it to the various foreign markets.

    On the other hand I'm a capitalist and believe in free market enterprise. Our government has heavily subsidized ethanol (zero sum gain by some accords) and it caused corn prices to go thru the roof. Then came the wind and solar subsidies - NG has gotten nothing.

    Round trip (all costs included) LNG to Europe is in the 4 to 5 mcf area, to the Asian markets it's around 6mcf. Panama Canal is getting widened, once completed the Super LNG tankers will be able to pass thru it and lower transport costs accordingly to Asian markets.

    We will see NG move to the 5.50 to 6.00 area across the futures markets for at least a year or two out before rigs move back into the dry side of the play. It may need to be higher than 6 if Oil continues to hold in the 100 area. All of this is going to come into play sometime between 2015 to 2017 - weather the largest variable.

    Nonetheless, it's going to happen - NG is heading higher by 2017 if not before, the EIA are idiots on their Long Term forecasts.

    Also, US imports aren't 11% of total production or consumption - way off there on your sources - at least on a Net basis. We import a small amount of LNG and get a decent chunk of pipeline flow from Canada (which has been steadily declining), in fact some of the pipeline flows into the northeast markets have reversed flows - Marcellus production is now serving some of the Canadian markets. Pipeline flows have been reversed. Maximum Net Imports are in the 3bcfd area LNG imports are negligible. Canada has big storage deficiencies, we are heading towards net exports by 2015 when Mexico exports come on hard and the first LNG exports hit.

    I'm not a coal guy, but stockpiles are very low in the USA. Some
    of the Coal Stocks might be good plays - but no doubt the low cost US NG producers are still good buys at present levels.

    JMHO - up nicely in RRC, SWN, ECA, SD, and UPL so far and I think things are just getting warmed up.

SD
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