Energy Prospectus

I will be lowering the ngas prices used in my models from $8.00 to $6.00 for Q3 and $9.00 to $7.00 for Q4, assuming that Freeport LNG is back online early in Q4. Weather is the primary driver of natural gas demand and ngas prices will be flopping all over the place with each weather forecast. La Nina is still in control of the weather pattern and Miss La Nina has caused some of the coldest winters on record for the U.S.

Here are the impacts on our five "gassers"
Current valuations:
> Antero Resources (AR) from $67.00 to $63.50.
> Comstock Resources (CRK) from $39.00 to $36.00
> EQT Corp. (EQT) from $71.00 to $66.00
> Range Resources (RRC) from $58.00 to $53.50
> SilverBow Resources (SBOW) from $91.00 to $85.00

If Freeport LNG does come back to max capacity by year-end and we have a cold start to the winter, ngas prices could go a lot higher than where they are today. We are still going to begin the winter with ngas storage at a deficit to the 5-year average and Europe will be begging us for all the LNG we can deliver.

Also, keep in mind that I am using conservative valuation multiples for all of our model portfolio companies.

Carnage in the NG markets

Down $ 1.09 at the time of writing down 17 %


HOUSTON, June 30 (Reuters) - A U.S. pipeline safety regulator on Thursday said it found unsafe conditions at a Texas liquefied natural gas export facility and will not allow owner Freeport LNG to restart the plant until an outside analysis is complete.

A June 8 blast and fire knocked out Freeport LNG's Quintana plant, which exports about 15 million tonnes per year of the chilled fuel.

The preliminary finding by the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) indicated a restart could not happen before September at least.


"Continued operation of Freeport's LNG export facility without corrective measures may pose an integrity risk to public safety," PHMSA said in its preliminary report.

The report on the second-biggest U.S. LNG export plant indicates further global shortages and higher prices in Europe and Asia. The loss of Freeport's exports comes amid reduced gas flows to Europe from Russia's Nord Stream pipeline, and as China's LNG demand is recovering from COVID-19 shut-ins.

A Freeport LNG spokesperson declined immediate comment.

The regulator ordered the company to submit within 60 days a plan for an outside investigator to provide a report on the extent of the damage to the facility. Freeport must also hire a third-party to review the state of its LNG storage tanks.

Only after the reviews are completed can the company submit a plan to repair the damage, it said, further complicating the company's plan for a partial restart.

This will be a 6 month outage...they are in no rush

test

The Freeport LNG' facility is now suddenly unsafe. Where there the regulators in the past? Something does not sounds right with this LNG explosion....

Back door way of banning exports

I would suggest the owner of Freeport should make a sizable donation to
to the “ big guy” and put Hunter on the BOD if they ever want to see this plant in operation again

I’d like to see another rule enacted, no regulator gets paid until the operation goes back online