AR, EQT, GPOR and RRC

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dan_s
Posts: 37340
Joined: Fri Apr 23, 2010 8:22 am

AR, EQT, GPOR and RRC

Post by dan_s »

Read: http://www.oilandgas360.com/renowned-en ... 4-maybe-5/

Read the article above and you will see why I keep recommend that you add more exposure to natural gas. Mark Fisher is a sharp guy and he sees what I have been telling you in my weekly podcasts; the U.S. natural gas market is going to be MUCH TIGHTER heading in the next winter heating season.

My Top Picks for natural gas and NGLs are: AR, EQT, GPOR and RRC. Forecast/Valuation models for all four companies are available on the EPG website.
Dan Steffens
Energy Prospectus Group
k1f
Posts: 455
Joined: Tue May 04, 2010 9:47 am

Re: AR, EQT, GPOR and RRC

Post by k1f »

Let's hope Mark Fisher isn't pinning all his hopes on the sloppy term "normal." Climate has been complexly abnormal for years, and overall warming up. His forecast that oil will trdae in a channel seems to be borne out by market behavior so far, though the top is more reiable than the bottom, which is approaching the worst conditions of last year.
dan_s
Posts: 37340
Joined: Fri Apr 23, 2010 8:22 am

Re: AR, EQT, GPOR and RRC

Post by dan_s »

It is not all about the weather.

Go to this EIA website link: https://www.eia.gov/dnav/ng/hist/n9070us2m.htm

U.S. natural gas production is down and demand is up an estimated 2.5 Bcf per day year-over-year. < This is a recipe for higher gas prices regardless of what the weather does.

As I posted earlier, the delta to the 5-year average amount of gas in storage has declined 228 Bcf over the last 16 weeks. I think we can all agree that during the last 16 weeks the weather has been rather mild. There is a lot of industrial demand for gas coming on-line over the next 18 months and exports are also increasing.

Last winter was on the mild side and draws from storage from November 1 through March 31 were only 75 Bcf below the 5-year average. A normal winter will increase draws by 300-400 Bcf during the next winter. Keep in mind that a lot more homes now heat with natural gas than they did five years ago.

It is already a sure thing that we will have a lot less gas at the end of October, 2017 than we did at the end of October, 2016. Wall Street is not paying attention to natural gas these days. If my forecast that we will see natural gas storage move below the 5-year average by the end of September is correct, Wall Street will wake up to this sub-sector.
Dan Steffens
Energy Prospectus Group
cmm3rd
Posts: 512
Joined: Tue Jan 08, 2013 4:44 pm

Re: AR, EQT, GPOR and RRC

Post by cmm3rd »

Dan,

GPOR continues to decline, with most others in the sector. It appears to be hitting a 7 year low. What is the bear case that would support this move, and what part of it do you think the market is being influenced by, to result in this severe degree of price weakness?

How, if at all, does consideration of the bear case, and JP MOrgan's rationale, influence your thinking?

I saw the JP Morgan downgrade to Neutral and lowering of PT from $22 to $17. Do you have access to their reasoning?

Thanks
dan_s
Posts: 37340
Joined: Fri Apr 23, 2010 8:22 am

Re: AR, EQT, GPOR and RRC

Post by dan_s »

They should report strong Q2 results.

At this time of year, Wall Street is not focused on natural gas. Let's see what happens to all four of these when gas in storage goes below the 5-year average.

The "Bear Case" for Gulfport is poor well results in SCOOP, but so far the well results are very good. Gulfport has a solid technical team and they have drilled hundreds of very good horizontal wells.
Dan Steffens
Energy Prospectus Group
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