Natural Gas: Last Month's Rally Review And Near-Term Outlook [View article]
A lot of feedback from operators that they are very encouraged by nat gas in the $4.50 range. It appears that hedging activity is very active at the moment, particularly for 2014.
Schlumberger's Transformational Product For U.S. Oil Shales [View article]
Ochamark,
SLB buying an upstream operator, FST or any other, probably is unnecessary and highly unlikely in the context of what they are saying their strategy is. However, creating a fundraising arm, perhaps in cooperation with a private equity firm or a energy-focused fund, to fund these type of initiatives with external capital would seem very logical: capital intensity is a clear problem in the scalability of the SPM product.
Just imagine SLB bringing to a cash-starved operator at the brink of a property fire sale a full suite of technologies, logistics and vendor financing that would bridge the development to a cash flow break-even point - there is a certain appeal to that.
Marcellus And Utica: Will 2013 Deliver A Major Breakthrough In The Plays' Northern Extension? [View article]
ATrautmann,
I do not have a comment on the most recent move in the MarkWest unit price, but overall, the upward trend should not be all that surprising. Their build out plan in the Marcellus/Utica is on its finish line. Business risk is much lower in the operating phase relative to the development phase which should have a major impact on their discount rate. Also, the Marcellus has proven a much larger and faster moving opportunity than one could imagine just a few years ago. This should give additional growth opportunities. I cannot comment on valuation - need to look at it more closely.
Natural Gas: Last Month's Rally Review And Near-Term Outlook [View article]
Will put STO in the pipeline, it seems a bit undercovered in the US. Just one quick comment, despite a low per share price, it is a giant with $70 bn market cap. I should also mention that Statoil takes its roots in the Norwegian oil sector. Norwegian North Sea production has been maturing and in a secular decline trend, forcing Statoil to look for growth alternatives elsewhere. That would be a challenge to any company, particularly of Statoil's size.
Energy Sector Correction: When Fundamentals May Not Matter [View article]
I like the Arthur Clarke link, very valid. It is hard to disagree with what you say. However, investors must pull the trigger at some point, one way or the other, so there has to be some logic behind the collective irrationality.
Energy Sector Correction: When Fundamentals May Not Matter [View article]
Atticvs Research, Great point on gold. With regard to healing already underway, certainly a possibility - it would be nice to see a quick bounce. I am concerned though that damage has be done in many sensitive areas and liquidations may need to run their course. I.e., we may not be done yet.
Natural Gas: Last Month's Rally Review And Near-Term Outlook [View article]
Marine85,
I wish I had a brief answer. Seemingly, they are very levered to an upward move in gas prices. However, so far gas prices have moved at the front end which is hedged to a significant degree, and the back end, which accounts for the majority of the company's value, is unchanged. Strategically, ECA's gas assets are not the lowest-cost in the industry (that's what forces them to work so hard on new venture opportunities). As such, those assets may not be the most profitable in the longer term, or at least breakthroughs will be needed on the cost reduction front, which they have promised.
On new ventures side, commerciality is still to be proven in places like Duvernay, TMS, Eaglebine, and Miss Lime. I like what I see in their Niobrara and Piceance Mancos plays (the latter is terrific, I think), but even those are still in very early stages of optimization.
Having said all that, the stock price reflects all those challenges, I think. The "hidden" value seems to be there. However, that value can only be unlocked operationally, and that takes time and some luck.
I very much like the company and their opportunity set, but I think, if you are thinking about a short-term trade, it may take additional market's optimism towards natural gas for the stock to ouperform. So is your bet on ECA's operating story and positive news flow from their various plays, a takeout, or the direction of natural gas?
Natural Gas: Last Month's Rally Review And Near-Term Outlook [View article]
Robbieboggie,
Thank you for the Amaranth reminder, very valid. However, i am also curious, what is your specific view? Where will July 13 Nymex trade in a month from now? So far we have two view points in this thread: $3.90 and $4.50. What's yours?
Natural Gas: Last Month's Rally Review And Near-Term Outlook [View article]
J_Smiley,
I agree that hedging 100% of future production is not feasible (besides, it would be impossible to hedge the cost line). But $5 hedged for two years would make a huge difference to the certainty of returns, given the decline profile.
Natural Gas: Last Month's Rally Review And Near-Term Outlook [View article]
Niobrara Shale: WPX Energy's Discovery Well Flowing Strong - Renaissance In Piceance? [View article]
Thank you for the Par info, most helpful.
A New Liquids-Rich Shale On The Rise: Important Data Points For Mancos-Niobrara [View article]
Par indeed has a very meaningful exposure, thank you for pointing out.
Schlumberger's Transformational Product For U.S. Oil Shales [View article]
SLB buying an upstream operator, FST or any other, probably is unnecessary and highly unlikely in the context of what they are saying their strategy is. However, creating a fundraising arm, perhaps in cooperation with a private equity firm or a energy-focused fund, to fund these type of initiatives with external capital would seem very logical: capital intensity is a clear problem in the scalability of the SPM product.
Just imagine SLB bringing to a cash-starved operator at the brink of a property fire sale a full suite of technologies, logistics and vendor financing that would bridge the development to a cash flow break-even point - there is a certain appeal to that.
Quicksilver Resources: 25% Barnett Sale Is A Positive, But Challenges Remain [View article]
Marcellus And Utica: Will 2013 Deliver A Major Breakthrough In The Plays' Northern Extension? [View article]
I do not have a comment on the most recent move in the MarkWest unit price, but overall, the upward trend should not be all that surprising. Their build out plan in the Marcellus/Utica is on its finish line. Business risk is much lower in the operating phase relative to the development phase which should have a major impact on their discount rate. Also, the Marcellus has proven a much larger and faster moving opportunity than one could imagine just a few years ago. This should give additional growth opportunities. I cannot comment on valuation - need to look at it more closely.
Natural Gas: Last Month's Rally Review And Near-Term Outlook [View article]
Natural Gas: Last Month's Rally Review And Near-Term Outlook [View article]
Bakken: The Bounty Of Super-Rich Gas - Everything Investors Need To Know [View article]
Energy Sector Correction: When Fundamentals May Not Matter [View article]
Energy Sector Correction: When Fundamentals May Not Matter [View article]
On crude, the difficult part is to figure out the moment when it is overdone. Do you sense we are already there?
Energy Sector Correction: When Fundamentals May Not Matter [View article]
Great point on gold. With regard to healing already underway, certainly a possibility - it would be nice to see a quick bounce. I am concerned though that damage has be done in many sensitive areas and liquidations may need to run their course. I.e., we may not be done yet.
Natural Gas: Last Month's Rally Review And Near-Term Outlook [View article]
I wish I had a brief answer. Seemingly, they are very levered to an upward move in gas prices. However, so far gas prices have moved at the front end which is hedged to a significant degree, and the back end, which accounts for the majority of the company's value, is unchanged. Strategically, ECA's gas assets are not the lowest-cost in the industry (that's what forces them to work so hard on new venture opportunities). As such, those assets may not be the most profitable in the longer term, or at least breakthroughs will be needed on the cost reduction front, which they have promised.
On new ventures side, commerciality is still to be proven in places like Duvernay, TMS, Eaglebine, and Miss Lime. I like what I see in their Niobrara and Piceance Mancos plays (the latter is terrific, I think), but even those are still in very early stages of optimization.
Having said all that, the stock price reflects all those challenges, I think. The "hidden" value seems to be there. However, that value can only be unlocked operationally, and that takes time and some luck.
I very much like the company and their opportunity set, but I think, if you are thinking about a short-term trade, it may take additional market's optimism towards natural gas for the stock to ouperform. So is your bet on ECA's operating story and positive news flow from their various plays, a takeout, or the direction of natural gas?
Natural Gas: Last Month's Rally Review And Near-Term Outlook [View article]
Thank you for the Amaranth reminder, very valid. However, i am also curious, what is your specific view? Where will July 13 Nymex trade in a month from now? So far we have two view points in this thread: $3.90 and $4.50. What's yours?
Natural Gas: Last Month's Rally Review And Near-Term Outlook [View article]
I agree that hedging 100% of future production is not feasible (besides, it would be impossible to hedge the cost line). But $5 hedged for two years would make a huge difference to the certainty of returns, given the decline profile.