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What is Up with Natural Gas? Replies |
HenryTo
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rffrydr
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 Posted: Wed Feb 01, 2012 1:47 pm Post subject: |
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Navistar, in face of direct demand, at long last makes a commitment to natgas fleet (largely thanks to the EPA guidelines)....rolling off line in six months.
Think of this fleet-to-be more like a train than truck however....dedicated to follow the "track" of pumps.
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rffrydr
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| Posted: Thu Jan 26, 2012 9:06 am Post subject: |
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Obama choosing to showcase UPS's "blue highway" natgas hub in his stop in Las Vegas today.
Local "pump" prices at still high at about $2/"gallon" with 30% inefficiency premium.
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rffrydr
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| Posted: Tue Jan 24, 2012 9:31 am Post subject: |
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The "homefield advantange" combined with the liquid gas premium working behind the scenes:
| Quote: | Let's look today at two energy companies making some very interesting news -- Apache (APA) and Chesapeake (CHK). Are either or both of these worthy of buying right now?
Apache has spent $2.85 billion to buy the privately owned Cordillera Energy, doubling its exposure in the Anadarko basin. This is another in a long list of majors buying more and more domestic natural gas shale assets in the past three years. But for Apache, this acquisition is different in two important ways.
First, by increasing its exposure into Oklahoma and Texas, Apache is in effect diluting its exposure to Egypt, a connection that cost shareholders dearly in 2011 during the conflict of the Arab Spring. While that exposure even before this acquisition was a very manageable 17%, management at Apache must still believe that transfer into domestic assets is a more reliable move over the long term. It's hard to argue with that.
Second, plays in the Anadarko basin shale are relatively more productive for natural gas liquids than for the more traditional "dry" gas that is represented by the $2.40 price on the Nymex. These "wet" products -- such as butane, hexane and heptane -- are still at very strong prices in open markets and represent great production margins, enough to keep some exploration & production companies working in fields even with battered "dry" gas pricing in place.
But the bottom line on Apache is that this deal shouldn't matter much; the purchase was at a reasonable premium, in areas Apache is already well established. Still, I have long believed Apache shares are wildly undervalued. We'll see whether this deal provides a catalyst to further interest and upside.
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http://realmoney.thestreet.com/articles/01/23/2012/big-news-energy
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HenryTo
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| Posted: Mon Jan 23, 2012 5:31 pm Post subject: |
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Morningstar on CHK's cutting production.
| Quote: | | Chesapeake Energy CHK on Monday announced plans to significantly cut its dry gas drilling rig count in 2012 in response to record-low natural gas prices and a dry gas hedge book that leaves the firm exposed to the lowest price levels in the past 10 years. Chesapeake intends to immediately curtail 500 million cubic feet of equivalent per day of gross operated production and could double this amount if low gas prices continue. The firm will lay down rigs in the Haynesville, Barnett, and Marcellus shales and will look to defer completions and pipeline connections wherever possible. We had been projecting Chesapeake's net gas production to increase 1% in 2012, to 2.721 bcfe/d. We estimate the company's revised operating plan will probably lead to a dry gas production decline of close to 300 mmcfe/d, or 10% year over year. Assuming an approximate 60% combined working interest across the Haynesville, Barnett, and Marcellus, this implies a gross reduction of 500 mmcfe/d, or less than 1% of U.S. natural gas supply. Accordingly, while we applaud Chesapeake's move to preserve shareholder value, we believe it will take more than a modest reduction in supply to solve the gas glut that exists in the United States. Chesapeake also disclosed plans to spend $1.4 billion (net of joint venture reimbursements) on undeveloped leasehold in 2012, all targeting liquids-rich acreage in plays in which the company is already active. Accordingly, look for more joint venture activity in the quarters ahead. Our fair value estimate remains unchanged at $32 per share. |
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rffrydr
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| Posted: Mon Jan 23, 2012 9:14 am Post subject: |
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Chesapeake slashing production.
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rffrydr
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| Posted: Sun Jan 22, 2012 8:35 am Post subject: |
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Manhattan, the last holdout, takes the pain:
http://www.nytimes.com/2012/01/22/business/heating-oil-costs-surge-and-many-in-northeast-cant-switch.html?pagewanted=2&_r=1&hp
| Quote: | “As a consumer, I’m very frustrated,” said Nancy T. Schmitt, an energy-sector investment adviser whose Upper East Side co-op burns the densest form of oil. Her complex of about 50 units is weighing whether to switch to natural gas or to a lighter fuel to meet the new rules. “I’m paying a high price for a dirty fuel, and I’ve got a cleaner fuel available and I want to see it happen,” said Ms. Schmitt, who was trained as an environmental engineer.
But by one estimate, she said, it would cost $2 million to connect her complex to the existing lines. Con Ed has been working to help organize buildings into clusters for conversion, to lower costs and diminish the inconvenience. |
Really this is a question of infrastructure--and how much it really costs.
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HenryTo
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| Posted: Thu Jan 19, 2012 12:16 pm Post subject: |
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| February gas plunges 5% to just $2.34. UNG down a similar percentage to $5.10 a share. To think I actually had bought some of this a few years ago at >$40 a share (pre reverse 1-for-2 split!). |
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rffrydr
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| Posted: Mon Jan 16, 2012 7:28 pm Post subject: |
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It's all in the lease contracts....yet again american socialism, the "property law," gets in the way. Now cheaper than coal in many places! That's a social good comminism could never have delivered.
First signs of winter last week and new steel plants (making fracking piping of course!) may be snake zeroing in on its tail!
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HenryTo
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HenryTo
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HenryTo
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HenryTo
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HenryTo
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| Posted: Wed Dec 14, 2011 1:39 pm Post subject: |
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| Plunge in commodities takes natural gas along with it. HH gas at $3.14 in mid-December. Simply amazing. UNG makes another all-time low. |
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HenryTo
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| Posted: Tue Dec 13, 2011 1:49 pm Post subject: |
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| Agreed. Not immediately but definitely in the next several years. Robotics, 3-D manufacturing/printing, more compact supercomputers, and faster communications will lead the way. Won't create that many unskilled jobs, however. |
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