BrotherMaynard

Plenty of Natural Gas: Exploration and Production Companies Keep Increasing Oversupply

excellent point about shut-in storage -- it should be considered inventory. the future supply problem b/c of lower rig counts is overblown. that's why curve flattening should be the next stage of this cycle.

just to expand on the EOG comment, stephen schork today:

"several Northeast pipelines started issuing operational flow orders (OFOs) in an apparent attempt to limit shippers exceeding their contractual limits...In addition to the Labor Day holiday, last week’s report also comprised the ratchet clause rollover. Injection ratchet clauses in the East require shippers to inject working gas through scheduled stages in order to preserve operational integrity. By September 01st no more than 80% of storage can be filled....According to the latest estimate from the EIA, maximum storage capacity in the East is 2.178 Tcf. As of two reports ago, week ended August 28th, estimated storage was 1.78 Tcf. That calculation was already 81½% of capacity or 1½ points above the ratchet. In other words, storage in the East over the last two reports was at operational capacity. Thus, the OFOs were a likely means to hold storage below the 80% threshold...What’s so bullish about that? Absolutely nothing."


here's the rest of schorks note: www.cnbc.com/id/327973...

Boone Pickens Puts His Money Where His Mouth Is on Energy

i don't see how you can divine any information from tbp's picks given that he has so many ulterior motives...who knows if the fund is just another marketing scheme? After all, a 98% loss is roughly the return most advertising companies get on their marketing dollars...

T. Boone Pickens' Hedge Fund Concentrates on Energy, Drops Basic Materials

how'd that energy fund work out for pickens in 2008?

whats that, you say...-95%?

amazing that warren buffett gets routinely thrown under the bus for his financials yet t boone pickens is praised as if he's some sort of luminary when it comes to investing in anything. way to go on that -95% return, t boone. oh yeah...and well done on prop 10.

Chesapeake: When Gas Prices Will Recover

"Barclays: US gas needs to go below $4 to balance oversupplied market"

www.platts.com/Natural...

Chesapeake: When Gas Prices Will Recover

Great rationale, weiwentg. this site needs more of this sober analysis. commodities are a completely random variable. all a conservative investor can do is buy a business that can thrive no matter what the price -- Be it $2nat gas or $12 nat gas. CHK used to be able to do that until their capital structure recently became prohibitave. This is, again, where mcclendon's ideologue-mentatlity ("nat gas will never go to $2") has seriously jeoprodized its long-term prospects. Yes they have lots of valuable real-estate...but this is precisely the worst time in history to attempt large-scale, premium-inclusive, monetization of large assets. I'd throw Rio Tinto in this bin, too.


On Dec 11 09:17 AM weiwentg wrote:

> It does sound to me like Aubrey has a handle on his company's financial
> situation and his hedge book. However, what worries me is that he
> seems to assume he can sell assets in every environment. He managed
> recent large sales to BP and Norsk Hydro in a very difficult environment,
> but that's not a reason to assume he can keep doing that. Remember
> what Charles Prince said about how Citi was still dancing?
>
> The comment about Aubrey being a buccaneer really did it for me.
> The guy is hyper-aggressive. I happen to think he has a high chance
> of making it big. That said, there's downside risk in that if natural
> gas gets under, say, $4 for an extended period, I can see a situation
> in which he drives the company into the ground (meaning it needs
> a highly dilutive capital injection or files bankruptcy). Sub $4
> natural gas is a bit of a doomsday scenario, but you can never tell
> what commodity prices will do.

Chesapeake: When Gas Prices Will Recover

Other famous ideologues - Bernie Ebbers, John Mackey, Jeff Skilling...all lived in a perpetual state of denial. The reason why everybody likes them so much is simultaneously why they shouldn't be liked and their stocks should be avoided.