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936horn

By 936horn
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Trey3216

Trey3216 15452

Posted
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12 minutes ago, Dr. Beeper said:

It can be a beat up sector for a long time. Longer than a lot can stay liquid. A buddy of mine trying to raise money met with an energy money guy who said energy is about as palatable as tobacco or porn. 

No doubt.   But like I said, money will change hands between time too.  The run down in natty with nearly 80% on the short side will pay a reckoning in the short run at some point.   

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Trey3216

Trey3216 15452

Posted
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5 minutes ago, Dr. Beeper said:

Maybe. Do you purely look at the technicals?  Fundamentals suggest gas at $2 is the new normal. Storage at record levels. Inundated with supply in the NE and when Permian infrastructure comes online, there’ll be more supply. Winter never came. Gas is fundamentally fucked. 

Both.  Production is down about 8% from the highs of last fall.  Demand is higher worldwide.  Supply is ‘inundated’ in certain terms but is on low ends of historic supply in other terms.  It’s a question of which fundamentals one wants to look at as well as technicals.   
 

production absolutely too high, but is leveling out and will decline rapidly according to modern depletion estimates.  
it’s been more than priced in though.  

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Horns99

Horns99 172

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I disagree about production leveling out. Rates of increase are slowing but they’re still increasing - and storage is way beyond 5-year average because of these warm winters. And worldwide demand is meaningless as this is a regional commodity. We’ve got far too much gas in this country and I can’t get envision it getting better without more pain. 
Actually Trey is correct, Production is off it’s all times highs. NE production definitely seems to have hit its high & isn’t coming back anytime soon. Waha production is trapped for the most part, until either Mexico gets it act together & the latest Kinder pipe keeps getting delayed.

Demand is up with Mexico & LNG. The lack of a Winter has completely killed the natty market. We are actually a couple Bcf/D tighter in S&D balances. Could be a interesting summer if we get hot, power burn will be high @ these prices
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Archer

Archer 474

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10 minutes ago, DCA_HORN said:

It's pretty brutal in houston right now. Any job that is posted gets like 200 applications in a few days. If anybody is looking for a reservoir/reserves engineer let me know.

Best of luck. 
 

It’ll be interesting to see how many technical professionals cut since 2015 just bail and leave the industry. I was talking to a landman buddy of mine who graduated around 2010, I think he said something like 4 of his class of 20ish were still in the industry. 

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Trey3216

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France is also converting a bunch of power gen to Natty, which even with their Russian supplies won’t fully equilibrate (and US LNG is competitive price wise). 
 

 

the market is a lot tighter than it seems, even given current production.  As production is dropping, things will be much tighter.   Extended power demand for summer is going to exacerbate. 

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Trey3216

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3 minutes ago, Lobo said:

So we're gonna continue to use 90-95mm BPD as a planet for this next couple years?  

We’re talking natgas right now, but oil demand will keep rising for at least another decade if not 2-3.  The amount of oil we use for things outside of pure energy is laughably misunderstood.  

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Guest Lobo

Guest Lobo

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Well, it's disparate between the U.S. and the rest of the planet.  But yeah, dirty little secret about how much is used on passenger vehicles versus commercial diesel, mass transit, industrial use, petro/most plastics, and non-transport power.  Kinda like how we are misled in Texas about how much water is used on lawns versus how much is actually used by more commercial endeavors.  

This video should help explain:  

 

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Horns99

Horns99 172

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Okay, but infrastructure will come to the Permian and more is on the way in Appalachia. When that happens, associated gas in the Permian will be additive, and Marcellus producers make money at $2. I don’t think those factors can be discounted. 


Perm HWY now is expected to come on March 2021 @ the earliest, could be later due to the law suits filed last week. App isn’t constrained anymore, so that isn’t an issue. Not sure they are making $$$ @ $2, but even if they are it doesn’t matter, they aren’t getting close to $2 for their gas. Summer DOM basis is probably .50 back, then add in gathering charges on top of that. Check out the stock prices of companies like Antero & Range.
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BTW

BTW 370

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For those with access to TXU for electricity.  I have been on their "Market Edge" electricity plan for a while now.  The pricing is pinned to the closing NYMEX price of natty for the previous month.  I'm making a little bit of lemonade with all these lemons.

It's a bloodbath here in Midland,  a friend at Apache said they've been going floor by floor all week handing out pink slips.  Heard pioneer is also trimming some fat.  Concho claims they aren't doing layoffs, but I know they are doing some "strategic human capital adjustemnts" 

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Girdwood

Girdwood 118

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3 minutes ago, BTW said:

For those with access to TXU for electricity.  I have been on their "Market Edge" electricity plan for a while now.  The pricing is pinned to the closing NYMEX price of natty for the previous month.  I'm making a little bit of lemonade with all these lemons.

It's a bloodbath here in Midland,  a friend at Apache said they've been going floor by floor all week handing out pink slips.  Heard pioneer is also trimming some fat.  Concho claims they aren't doing layoffs, but I know they are doing some "strategic human capital adjustemnts" 

Re: Apache. Remember their big Alpine High discovery in 2016? Ouch.

https://www.rigzone.com/news/apache_ditches_alpine_high_after_3b_writedown-27-feb-2020-161224-article/?utm_campaign=DAILY_2020_02_27&utm_source=GLOBAL_ENG&utm_medium=EM_NW_F1

Spoiler

(Bloomberg) -- Apache Corp. is officially calling it quits on a highly publicized but disappointing shale discovery in West Texas after vehemently defending the play’s prospects for about three years.

The Houston-based company posted a roughly $3 billion writedown on its Alpine High project, a find from 2016 that fizzled when it turned out to hold more natural gas than oil. Apache will instead focus on offshore riches in Suriname, where the explorer recently struck crude and enlisted French oil titan Total SA as a partner.

“Apache has no current plans for future drilling at Alpine High,” Clay Bretches, chief executive officer of Apache’s pipeline spinoff, Altus Midstream Co., said in a statement.

The discovery was announced in September 2016 to much fanfare and claims the field held 3 billion barrels of crude and 75 trillion cubic feet of gas. But it quickly became apparent that that corner of the prolific Permian Basin was far richer in natural gas and its byproducts than more-valuable oil. The Alpine High became even more worrisome for investors as gas supplies in the region ballooned and prices cratered.

Until recently, Apache executives defended the Alpine High, saying in May that investors didn’t yet “have an appreciation for the potential cash flow generation from the liquids play at Alpine High.”

Star Geologist

But roughly five months later, the star Apache geologist who led discovery of the field abruptly left. At the time, the departure of Steven Keenan, Apache’s senior vice president of worldwide exploration, raised red flags for the company’s other high-profile prospect -- offshore Suriname.

Apache calmed investors who were nervous Suriname would be a bust last month when it disclosed a major discovery. The announcement came shortly after Apache brought Total aboard to help develop the project on Suriname’s Block 58.

“We are currently drilling the second well on Block 58, Sapakara West-1, and are encouraged by what we’ve seen so far,” Apache CEO John Christmann said Wednesday in a fourth-quarter earnings statement.

The company will now shift its capital spending to focus on Suriname rather than on “near-term growth opportunities,” Christmann said. Altus Midstream, meanwhile, will look for new customers to fill its pipes.

“We are aggressively pursuing third-party volumes to replace declining production from Alpine High and maximize throughput at our Diamond processing facility,” Bretches said in Altus’ fourth-quarter earnings statement.

 

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Guest

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Posted
Posted
43 minutes ago, Lobo said:

Looks like it’s time to start buying using endowment money.   Who here’s selling acreage or production?  
 

sorry for your loss.

Using endowment money for acreage sounds like a surefire way to ensure you won’t get any more endowment money. 

The play is using family office money for buying production at cheap valuations. 

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Guest Lobo

Guest Lobo

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Posted

36 hours later and it is still bizarre to me that Sitton lost.  I know that Craddick and Christian had it in for him for myriad reasons, but I would still think his money, incumbency, and support from Abbott would have carried the day.  Fun fact-his former GC's is married to a favorite former Austin councilwoman of Surly's.  

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