Energy Prospectus

Natural gas supply and demand might be a lot tighter over the next year than analysts expect according to some. US natural gas supply has declined over the last few years with the lower drilling activity. While the U.S. has massive supplies that can be developed it might take a bit longer to get it to market as pipeline construction is a bit slower than expected especially in the Northeast.

http://www.artberman.com/strong-natural ... pply-2017/

One of the largest surprises of the Q1 earnings conference calls has been how strong NGL prices have been, and they are expected to continue to remain stronger than forecast. For modelling purposes the higher NGL prices result in a higher discounted cash flow valuation.

This is why I stress how important it is for investors to know the production mix (crude oil, natural gas and NGLs) of the companies that they hold. I break out the production mix at the bottom of each forecast model. NGL prices have improved a lot over the last two quarters and I think they will go a lot higher in the Q3 and Q4. Could be a bit lower in Q2 than in Q1, but lots of demand for NGLs and natural gas coming in Q3.