Energy Prospectus

Over the next few days I will be taking a hard look at each company's forecast/valuation model based on operations updates from a few of them and adjustments to the commodity price assumptions. I am lowering my WTI oil price forecast by $2 to $40/bbl for Q4 2020 and staying with $50/bbl for 2021. For most of them, the increase in my natural gas price assumptions to $2.60 for Q4 2020 and $3.00 for all of 2021 will more than offset the lower oil price. I'm also increasing my NGL price assumptions to what each company got paid in Q4 2019 for Q4 2020 and the average of what they got for NGLs in 1H 2019 for all of 2021. Range Resources (RRC) will get the most benefit from higher NGL prices. Cimarex (XEC) and EQT Corp (EQT) also get a nice revenue boost from higher NGL prices. For the others, NGLs are a small percentage of their sales.

From TipRank: "Range Resources initiated with an Outperform at Northland Securities. Northland analyst Subash Chandra initiated coverage of Range Resources with an Outperform rating and $14 price target. Range is the firm's top natural gas idea, said the analyst, who sees its cost structure continuing to improve on expiry of legacy midstream commitments and notes that the company has been successful reducing maintenance capital expenditures."

Range Resources is hosting our webinar on Wednesday, October 21 and I HIGHLY RECOMMEND you attend the live event. Understanding the SURGE in natural gas and NGL prices that will happen this winter is key to making a lot of money on the gassers.

My updated forecast models for EOG and FANG have been posted to the EPG website with no change to my valuations of $69.00 and $64.00.

October 21 EPG Webinar

To attend you must register at the link below.
https://zoom.us/webinar/register/WN_nJQ ... LFHXs6O9jw

The front month NYMEX contract for U.S. natural gas closed at $2.69/mcf on Friday, October 16.  Compares to the average ngas price of $1.92 in September.

The U.S. natural gas market is going to be extremely tight by the end of the winter heating season.  Range Resources, my Top Pick within our "gassers" is going to host the webinar with their top gas marketing people updating us on the gas and NGL market.  By the end of October, I expect the U.S. natural gas price to jump to over $3.00/mcf and it may go over $4.00/mcf by year-end.
The EIA ngas price forecast for 2021 is now $3.13/MMBtu.  At a 2021 average gas price of $3.00/mcf all stock prices of my top four gassers (RRC, EQT, CRK and GDP) should double within six months.