The drills won't go towards gas if gas is not presenting an economic preposition. They will stop drilling altogether. They might produce as much as possible from the existing wells, but being cash short they won't be able to take on massive new capex ...
Regarding the drilling for natural gas / NGLs, natural gas was a more massive market, and the prices at which they decided to drill and hedged at were higher.
Patriot Coal Shareholders Should Switch To James River Coal [View article]
wlliancao, as a rule of thumb you can believe that no one likes to buy trouble. No one likes to buy Greek banks in the middle of the turmoil no matter how cheap. No one likes to buy coal companies when they can go belly up in an instant.
That's the reason why most acquisitions usually happen at the dumbest possible timing. Because at those times it "seems" to make sense. Things are good. They're predicted to remain good.
Signal Of Coal Rebound As Production Rises [View article]
They don't see any positive trend, the demand is not increasing other than due to seasonal demand. The demand will increase to close to 2011's levels once natural gas goes up enough, but probably not before we're closer to the end of the injection cycle.
Signal Of Coal Rebound As Production Rises [View article]
Insiders tend to be more attuned to present trends, and not so much to how those might develop 6 - 12 months down the road. The present trends are ugly as they can be.
A couple of things: 1) I don't expect NGL pricing to hold. It will break like natural gas. When it does I expect less drilling overall (not just a switch towards NGLs); 2) The 10% from CHK certainly includes their expectation of improvements. 10% should be enough to give us $4 somewhere in 2013, at least.
They're doing arm waving as well, there is no certainty about the future one way or another. Natural gas at a point back in April discounted the certainty that storage would fill up - at that point you just needed uncertainty that it would fill up for natural gas to rally. You got that uncertainty through dispatch switching and the resultant aggressively lowered injections.
As for 2013, the only way one can have a large rally is through production drops. Those drops have every reason to happen, as: 1) They're already showing up in the production numbers, albeit slowly; 2) The rigs have gone elsewhere so those drops are bound to accelerate.
Something like CHK shows, through their own predictions, that concentrating in wet plays leads to a 10% drop in 2013 production. That's ballpark what we need to get the rally.
Still, yes, it depends on the summer, then the winter, then the summer, and we can't be certain about any of those. So everything can always turn to pumpkins.
Lorillard Takes The E-Cigarette One Step Closer To Mainstream [View article]
If they find a way to get margins, at least it's better for them to be the cannibal than the victim.
I went looking at Dragonite (listed in HK) because they seem to have valuable IP in the sector, but the company is a giant joke in terms of management. Indeed, I'd recommend others to read their reports as they have so many comedy moments in them. Like doing a capital increase and, since they didn't need the money right away and wanted to get better returns (or so they claim), they started gambling in the stock market and lost a good part of it.
The company, if managed well, could be a pure IP play with good potential. It's unfortunate that it's being run as if some kind of fraud.
They'll be capital-constrained if they don't have measurably profitable drilling to do. They'll stop drilling if the wet plays become uneconomic as well. Then they'll drill only for oil.
I don't think the shadow inventory will be a huge factor, because the normal natural gas production drops will overwhelm any such factor. The normal production drops are about the same as drilling 11000 wells doing 0.7 Bcf in a year.
Natural Gas - The Good And The Bad [View article]
Regarding the drilling for natural gas / NGLs, natural gas was a more massive market, and the prices at which they decided to drill and hedged at were higher.
The Altucher Effect [View article]
The Altucher Effect [View article]
Farmer Mac: A Different Way To Play The Agriculture Market [View article]
Patriot Coal Shareholders Should Switch To James River Coal [View article]
That's the reason why most acquisitions usually happen at the dumbest possible timing. Because at those times it "seems" to make sense. Things are good. They're predicted to remain good.
Signal Of Coal Rebound As Production Rises [View article]
Farmer Mac: A Different Way To Play The Agriculture Market [View article]
Signal Of Coal Rebound As Production Rises [View article]
That is, the market should turn even while the news are still bad.
But it sometimes doesn't. eheh
Signal Of Coal Rebound As Production Rises [View article]
Natural Gas - The Good And The Bad [View article]
1) I don't expect NGL pricing to hold. It will break like natural gas. When it does I expect less drilling overall (not just a switch towards NGLs);
2) The 10% from CHK certainly includes their expectation of improvements. 10% should be enough to give us $4 somewhere in 2013, at least.
Natural Gas - The Good And The Bad [View article]
As for 2013, the only way one can have a large rally is through production drops. Those drops have every reason to happen, as:
1) They're already showing up in the production numbers, albeit slowly;
2) The rigs have gone elsewhere so those drops are bound to accelerate.
Something like CHK shows, through their own predictions, that concentrating in wet plays leads to a 10% drop in 2013 production. That's ballpark what we need to get the rally.
Still, yes, it depends on the summer, then the winter, then the summer, and we can't be certain about any of those. So everything can always turn to pumpkins.
Lorillard Takes The E-Cigarette One Step Closer To Mainstream [View article]
I went looking at Dragonite (listed in HK) because they seem to have valuable IP in the sector, but the company is a giant joke in terms of management. Indeed, I'd recommend others to read their reports as they have so many comedy moments in them. Like doing a capital increase and, since they didn't need the money right away and wanted to get better returns (or so they claim), they started gambling in the stock market and lost a good part of it.
The company, if managed well, could be a pure IP play with good potential. It's unfortunate that it's being run as if some kind of fraud.
Natural Gas - The Good And The Bad [View article]
Natural Gas - The Good And The Bad [View article]
Natural Gas: The Buy Of The Decade [View article]