Bill Powers on NG

[Laurin_DE]

Interesting read:
http://jutiagroup.com/20140116-five-way ... ll-powers/

I had asked here about Bellatrix (also mentioned by Bill) before and have started a position since... worth a closer look, imo.

cheers M L

[dan_s]

I am not a big fan of Bill Powers. He has no real world oil & gas experience. I do think natural gas prices will move a bit higher but I doubt we will see $6/mcf anytime soon. We could see a brief spike to $5 if we get several more significant cold ways and gas in storage dips below 1,500 bcf in March. However, there is a lot of associated gas coming on-line this summer in the Eagle Ford. The Marcellus and Utica shale are also ramping up.

Bill is right that the dry gas shales (Barnett, Haynesville and Fayetteville) need higher gas prices to justify more drilling, but we don't need that gas now because the "wet gas" areas are producing so much.

I "hope" Bill is right, but I really don't see it coming anytime soon. What's going on now is all just because of the very cold winter.

[Laurin_DE]

I may not share his view and ideas, but I like that he tries to look at the somewhat broader picture and the general trends. I don't think that there is any chance of a NG price at or above USD 6.00, but still I think BXE is a compelling story.

[dan_s]

We use a lot of natural gas in this country and demand will be going up by more than a TCF per year starting in 2016 due to LNG exports and industrial demand. Demand for electric power generation is also steadily going up.

I actually think we will see much higher gas prices by the end of this decade. By "high" I mean in the $8.00 - $10.00 range. I just don't see any near-term price spike above $5.00. That will only happen if we get a "Polar Vortex" in April.

U.S. demand for natural gas has gone from 22 TCF in 2008 to an estimated 26.5 TCF in 2013.

Demand could be 35 TCF by 2020, including more than 5 TCF in exports.