Penn East P/L 86'd

[SergioSays]

Good morning Dan,

do you see any material downside to our appalachian based gassers due to the loss of this pipeline?

thanks in advance,

Cliff

[dan_s]

That pipeline would not have impacted 2021 or 2022, which is what my valuations are based on. It will keep a lid on their growth plans, which in turn will keep the overall U.S. gas market under-supplied. They will get higher prices for the gas they can get to market. Regional shortages in the Northeast will cause spot market price spikes. AR, EQT, RRC and XEC/COG all have outstanding marketing teams that know how to take advantage of regional price spikes.

The Haynesville Shale (CRK and GDP) has the most potential for supply growth. Increased drilling for oil in the Permian Basin and Eagle Ford has the potential to increase associated gas supplies that are rich in NGLs. I really like SilverBow Resources (SBOW) that is an Eagle Ford company that has the potential to be a double for us this winter.