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Antero Resources Corporation (AR)
NYSE - Nasdaq Real Time Price. Currency in USD
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As of 12:52PM EDT. Market open.
11,541 reactions on $AR conversation
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LNG exports were up to 11.5BCF from 10.5BCF the previous week per Celsuis Energy
Sell off has abandoned all fundamentals. $OVV $FANG $DVN $EOG $CHK $AR $CPE $LPI are trading at prices as if long term oil and gas prices are below 60$ oil and 2.5$ gas. The divi and share buybacks will be enormous relative to current prices ......
59.81 NGL composite price on AR'S website today.
Natural gas just took a 6% sudden dump.
Will Freeport go back online before the elections?? Good question, but with the recent information it looks like at best it may only be partially back online by November. With full operations by end of year - hopefully by then. You would think that the Biden Admin would help them to push to open it to help the Europeans at this time, as they try and build up storage for the coming winter. But I think Biden is happy to have Nat Gas lower for his domestic agenda ( not that that is going to save his party in the Fall election) The weather in the US along with production and demand are going to determine the price until that opens up again. If it runs hot this Summer, the price of Nat Gas could go back up to where it was before the Freeport fire. Remember there are 7 export plants and Freeport is just one of them. AR only delivers a small appx. 2% of its export production to Freeport - so it isn't that big a deal to AR that it is shut down insofar as export sales are concerned and appx. 60% of ARs annual sales are for export and another 20% of nat gas ( non export) sales were already hedged a lower prices through the end of this year, so those sales aren't affected by the lower nat gas prices due to the fire at Freeport.
Two years ago if you told me AR would be $29 in July 2022, I would have been ecstatic. Even at $29 AR has to be one of the top gaining stocks when looking at the lows of 2020.
Titties Titos and Tannerite
Couple of SA articles out this morning about AR.
They do well to cover the current fundamentals:
AR's freeport volumes can/will be rerouted via excess firm transport.
Foreign demand for LNG is huge, exports are king.
Some analysts are calling for a plateau in NG production resulting in foreign linked prices.
Appalachia and Haynesville logged their first DUC increases; this should be the start of steady-state production in those regions. Will be monitoring Q2 reports for changes to production growth.
Is the economy actually more robust now that the gloom that we see reported? Stores seemed to be pretty robust over the weekend. Home improvement costs have been coming down. Ford recorded a 31% increase in sales in June. Oil and Natural Gas coming down is providing a pressure relief for the economy. Retail is discounting merchandise to reduce inventory. Could we actually see the markets stabilize here as supply chain starts continues to improve?
And what do you do when the fireworks go off? Well if you have sleep issues you sit down at the computer to review lng plant regulations. Well don't cha?
Title 49, Part 193 of the Code of Federal Regulations, The Freeport black swan incident raised a question of how are these plants regulated when in operation. It turns out operators are virtually totally controlled by regulators in mind numbing detail. Virtually every system and component is subject to inspections, reviews and study. Any modification to a system has to be subject to review and government approvals. There are approved operator and safety and security manuals that must be used. Personnel are required to have approved training. There are required inspections. Records of inspections, modifications and training must be kept for at least 5 years. Keep in mind that construction of the original plant is subject to an enormous list of regulation and the process overseen by regulators.
These regulations go on for volumes and leave little out or in the control of an lng plant builder or operator. You do it by the book or don't operate.
And if Federal regulation is not enough, the plant operation is required to coordinate with local regulators. So more layers of regulation.
An lng plant is obviously a potential safety problem.. an environmental hazard.. and a revenue source for regulators.
But my basic point is that with all the regulation and on going inspections, there is very little of a surprise when there is a system failure. The Freeport approved Energy Consultants pinpointed the issue virtually immediately-- a failure in a safety valve-- that was the cause of a 10 second vent of ng from an over pressured pipe that led to a 40 minute fire that was self contained and limited by the plant's approved fire fighting systems. Plant personnel monitored with approved monitoring equipment the problem and notified as required local and national regulators, And as required nothing to retify the problem can be done until the regulators show up, put their stamp to the problem and review the required repairs.
The plant has had no damage to it's trains, to its refrigeration systems or to other operating systems. Again according to the approved energy consultant. The necessary replacements of the defective valve and 300 feet of pipe is not a huge amount of work,
In a past life I ran a business subject to safety and health regulation. At times, we were shut down or partially shut down for one reason or the other. Getting permits and getting required work done to remove or resolve a safety issue was often more grueling than the original issue. Grandfathered parts, materials or techniques were simply unavailable at times. Skills are lost over time. Techniques change. Manufacturing of many things is done overseas these days.
There was the width issue of one gate at a swimming pool and a particular closure system that was no longer manufactured. And the gate opened in the wrong direction according to the one inspector even though it had opened that way with the approval of past inspectors for some 30 plus years. Times change--eh?
And I could go on with regulator horror stories-- how about having to change smoke alarms for 150 apartment units 3 times in 6 months at 40 a pop per each change. Well tenants take the batteries out of smoke alarms-- or did. New smoke alarms are sealed and tenant proof.. as if. But a smoke alarm without its batteries is just a not so pretty thing hanging on a wall. So you had to hardwire your alarms-- hook them into house current, Can you say have to hire an electrician? But then the state fire marshal got upset because-- well you know the first thing to happen in a fire-- yep the electricity goes out. So the final approved smoke alarm had to be hardwired with a battery back up that would be sealed against tenant action. And you had 30 days to make the required changes while hoping yet another regulator wouldn't get into the picture-- say Osha which had us give training to employees on how to safely use a ladder. And of course there were the now required annual inspections of the smoke alarms by an outside inspector... oh and a different inspector for the fire alarm system itself, And a different inspector for the sprinkler system. And a different inspector for the plumbing to provide water to the sprinkler system. And well I could go on -- I think at one point in a constuction project we had 11 inspectors on site. Some not agreeing with the other. Some out and out contradicting with would be required, And all having to be satisfied,
Good memories-- eh? Sometimes you had to just laugh instead of being frustrated. Oh yeah- the bars on upstairs window. Well yes they prevent young children from falling out windows-- where were the parents. But then again they also prevent people from getting out of an apartment when there is a fire. The Fire Marshall won out on that one...
I think the big news here is this drop in oil today. That’s a big move on no real news. Other question for the board. Anyone think any of the peers did any hedging a month ago?
Well...just waiting for the next ER. I hope that everyone has a wonderful Independence Day holiday weekend! GLTA.
Price bumped higher by Truist lowered GS...lol
They hate me as much on the $CVE forum as you guys did(with a couple exceptions on each). Valero's got some kind folks.
It's a shame I'm not more leveraged. I need to build the confidence to buy shorter dated puts and have a talk with my wife.
Just saw a better opportunity in Cenovus. Shrug. Best of luck, guys. Still agnostic on this one, but today's analyst note was... something else.
From an old article but, has some truth for today as well:
During a recession, rising unemployment means less driving to and from work, while households trim gasoline use by making less frequent trips to the supermarket.
In addition, fewer goods produced as the economy slows also translates into less demand for diesel fuel from truckers.
But analysts said natural gas demand from the power sector, the fastest growing and largest single user of gas, is not likely to react much to a recession.
Funds continue selling commodities.... NG Thursday low 5.40. Close below it $3.50-4 area is likely
Still 5 yrs of conservative cash flow buys the entire market value. I wish I had the conviction I had last week, but a hiccup in one facility brings us down 10% and people start saying gas will be $2 again. 🤷
Any long time holders thinking about selling if we break $30? I see no fundamental reason to do so, but we've got a really ugly chart that's already pierced the 20w SMA, and there's no support until $22. Thoughts?
Titties Titos and Tannerite
"Kinder Morgan Reports Massive Gas Release From Colorado Pipeline
An equipment malfunction resulted in 25 million cubic feet of gas being released."
And the regulatory red tape descends upon another easy prey.
Will Freeport go back online before the elections as this has a downtrend impact on the gas price?
Titties Titos and Tannerite
Back to selling monthly calls to accumulate shares. Hit the ZZZ button for a couple of weeks.
Over $300,000 raised for Burger King employee who never missed work in 27 years and got a backpack, movie ticket, and Starbucks cup as a gift
Market check: Energy leads stock losses, bond market moves lower
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