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  • First Crude Oil, Now Natural Gas... How Low Can It Go? [View article]
    With the decline in shale oil drilling, the volume of "associated gas" will also decrease. Like shale oil, the natural gas production decline curve is very steep with 80% (approx.) of the production lost after the first year. Factoring next year's planned retirement of coal fired power (with the switch to gas) and the opening of the first gulf coast LNG export terminal, next year will be a transition year. Nat Gas will be much higher in 2016 / 2017, so enjoy the low prices while they last.
    Dec 22, 2014. 09:01 PM | 3 Likes Like |Link to Comment
  • Will Natural Gas Fall Below $4 In The Near Future? [View article]
    If we have a hot summer and power demand is high, your projection is flawed. With Gulf Coast LNG export capacity coming online late next year, NG pricing (Henry Hub) will begin moving higher and further impact your projections. Also, keep in mind that the break even costs to drill is $5 / mcf (Variable cost) or $7 / mcf if you include land costs. Drillers will not drill further wells below breakeven costs (if they want to stay in business). Finally nat gas shale wells have a steep production decline (losing over 80% of their flow in the first year of operation). What does this mean - $5 /mcf nat gas by end of year and $7-8 / mcf within the next two years.
    Jun 30, 2014. 06:56 AM | 2 Likes Like |Link to Comment
  • Back To The Haynesville? - Conflicting Views From Chesapeake And Encana [View article]
    There is potential for some very large gas wells that can be economical at the $4 / mcf pricing. EOG (and others) continue to be active in the Haynesville. They're not drilling yet but are very active with seismic work to locate these "super" sweet spots.
    Feb 14, 2013. 08:42 PM | Likes Like |Link to Comment
  • Plum Creek Timber - A Unique REIT Worth Watching [View article]
    LPX owns no land and should not be considered a "land" company.
    Jun 24, 2012. 03:46 PM | Likes Like |Link to Comment
  • Investing Long-Term In Timber: Sometimes Boring Is Good [View article]
    Buy some timberland and grow your own. With a professional forester, it's not complicated, and the federal and state property tax deductions for reforestation are attractive. The 9% mentioned is correct in nominal terms, or about a 6% real rate of return. Timber is a long term investment with payouts around the 12 year, 18 year, and 23 year horizons. It's a fantastic inflation hedge.
    Sep 21, 2011. 09:09 PM | Likes Like |Link to Comment
  • Latest Housing, Employment Numbers Suggest Q1 Correction [View article]
    There is no abandonment of title - someone owns the deed to a defaulted mortgage. They'll be a lot of litigation that will stretch out for many years (with the defaulters eventually being forced out of their homes). I believe the banks will survive. Don't get too excited over the Ibanez case.
    Jan 9, 2011. 09:14 AM | 1 Like Like |Link to Comment