Working gas in storage was 3,508 Bcf as of Friday, September 29, 2017, according to EIA estimates. This represents a net increase of 42 Bcf from the previous week. Stocks were 161 Bcf less than last year at this time and 8 Bcf below the five-year average of 3,516 Bcf. At 3,508 Bcf, total working gas is within the five-year historical range.
Storage below the 5-year average in September, just as I promised would happen about six months ago.
Natural Gas Storage Report - Oct 5
Natural Gas Storage Report - Oct 5
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Natural Gas Storage Report - Oct 5
It now looks like a Cat 1 hurricane will hit the Louisiana Gulf Coast this weekend. That is causing some concern for commodity traders because Harvey and Irma caused a big dip in gas demand for power generation. I don't think this storm is strong enough to do much damage and it is headed to an area with less population. Offshore shut-ins will more than offset any decline in demand.
I still think there is a good chance that natural gas storage is 100 Bcf below the 5-year average when the next winter heating season begins. It is just six weeks away. Draws from storage begin mid-November.
I still think there is a good chance that natural gas storage is 100 Bcf below the 5-year average when the next winter heating season begins. It is just six weeks away. Draws from storage begin mid-November.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Natural Gas Storage Report - Oct 5
From mid-March through the end of September (29 weeks) the delta to the 5-year average has been -426 Bcf. That is a significant tightening of the natural gas market.
We do have an abundant supply of natural gas and it will take a colder than normal winter to cause regional shortages of gas, but the stage is definitely set for that to happen. It has been colder than normal in the western half of the U.S. for several weeks. Some forecasts show the cold air moving over the eastern half of the U.S. within ten days. "Brisk" weather in October in the Great Lakes Region should push up gas prices.
Reserves in the ground are totally different than deliverability. Gas utilities may be tested this winter.
We do have an abundant supply of natural gas and it will take a colder than normal winter to cause regional shortages of gas, but the stage is definitely set for that to happen. It has been colder than normal in the western half of the U.S. for several weeks. Some forecasts show the cold air moving over the eastern half of the U.S. within ten days. "Brisk" weather in October in the Great Lakes Region should push up gas prices.
Reserves in the ground are totally different than deliverability. Gas utilities may be tested this winter.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Natural Gas Storage Report - Oct 5
Comments from John White at Roth Capital. John is kind enough to send me this thoughts on several of the small-caps that I like.
------------------------------------------------
We had a very productive day at the ROTH-IPAA Oil & Gas Investment Symposium in Chicago, which took place on 10/3/2017. We sat through 20 minute presentations from 14 companies.
The underlying tone of the participants was positive, reflecting several weeks of positive news items on the macro for crude oil and natural gas. There was, in our view, several upbeat presentations from natural gas weighted companies (PQ-Buy, GDP-Buy) as well as discussions in the lobby that were centered on participants positive outlook for natural gas, and rightfully so, in our view. The 12 month futures strip stands at $3.04/MMBtu compared to a spot price of approximately $2.94/MMBtu. Henry Hub averaged $2.95/MMBtu in 3Q 2017, beating our estimate of $2.75/MMBtu. And while some sectors of demand, such as power generation, have disappointed in 2017, growing exports, primarily exports to Mexico and exports of LNG to global markets, have helped tighten the balance in relative terms.
At this conference, Permian focused names were under-represented and we enjoyed the line-up of featured companies involved in a wide range of basins and plays. Among these were: Chaparral Energy (CHPE-NC), a STACK focused name, PetroQuest Energy (PQ-Buy) primarily in the Cotton Valley, W&T Offshore (WTI-NC) in the Gulf of Mexico, Panhandle Oil and Gas (PHX-NC) diversified across the SCOOP/STACK, Eagle Ford and Permian, Evolution Petroleum (EPM-Buy) with its CO2 flood in North Louisiana, PDC Energy (PDCE-NC) in the DJ Basin Niobrara, BNK Petroleum (BKX TSE-NC) in the southern SCOOP and Goodrich Petroleum (GDP-Buy) primarily in the Haynesville Shale.
Goodrich Petroleum: We highlight the GDP presentation because it revealed two new data points: 1) BP (BP-NC) has drilled and completed two recent Haynesville Shale wells in close proximity to GDP’s Angelina River Trend acreage, and are displaying encouraging type curves to date, and 2) President and Chief Operating Officer Robert Turnham outlined, in his verbal remarks, a recent transaction wherein Tellurian Inc. (TELL-NC) has signed an agreement with a private seller for the purchase of 9,200 net acres in the Haynesville and Mid-Bossier shale for a purchase price of $85.1 million. Further analysis of this transaction is strongly supportive of our $23 target price for GDP. < I will take a hard look at GDP later this month. - Dan
------------------------------------------------
We had a very productive day at the ROTH-IPAA Oil & Gas Investment Symposium in Chicago, which took place on 10/3/2017. We sat through 20 minute presentations from 14 companies.
The underlying tone of the participants was positive, reflecting several weeks of positive news items on the macro for crude oil and natural gas. There was, in our view, several upbeat presentations from natural gas weighted companies (PQ-Buy, GDP-Buy) as well as discussions in the lobby that were centered on participants positive outlook for natural gas, and rightfully so, in our view. The 12 month futures strip stands at $3.04/MMBtu compared to a spot price of approximately $2.94/MMBtu. Henry Hub averaged $2.95/MMBtu in 3Q 2017, beating our estimate of $2.75/MMBtu. And while some sectors of demand, such as power generation, have disappointed in 2017, growing exports, primarily exports to Mexico and exports of LNG to global markets, have helped tighten the balance in relative terms.
At this conference, Permian focused names were under-represented and we enjoyed the line-up of featured companies involved in a wide range of basins and plays. Among these were: Chaparral Energy (CHPE-NC), a STACK focused name, PetroQuest Energy (PQ-Buy) primarily in the Cotton Valley, W&T Offshore (WTI-NC) in the Gulf of Mexico, Panhandle Oil and Gas (PHX-NC) diversified across the SCOOP/STACK, Eagle Ford and Permian, Evolution Petroleum (EPM-Buy) with its CO2 flood in North Louisiana, PDC Energy (PDCE-NC) in the DJ Basin Niobrara, BNK Petroleum (BKX TSE-NC) in the southern SCOOP and Goodrich Petroleum (GDP-Buy) primarily in the Haynesville Shale.
Goodrich Petroleum: We highlight the GDP presentation because it revealed two new data points: 1) BP (BP-NC) has drilled and completed two recent Haynesville Shale wells in close proximity to GDP’s Angelina River Trend acreage, and are displaying encouraging type curves to date, and 2) President and Chief Operating Officer Robert Turnham outlined, in his verbal remarks, a recent transaction wherein Tellurian Inc. (TELL-NC) has signed an agreement with a private seller for the purchase of 9,200 net acres in the Haynesville and Mid-Bossier shale for a purchase price of $85.1 million. Further analysis of this transaction is strongly supportive of our $23 target price for GDP. < I will take a hard look at GDP later this month. - Dan
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group