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cmakam

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Everything posted by cmakam

  1. Current U.S gas consumption is say 76bcd,if we assume a production decline is say 5 percent (i.e without taking into account any new supply),shouldn't we have say 3.5bcfd come online annually to keep production constant-where is this coming from?how price sensitive is this marginal annual production? Based on my admittedly limited perspective it appears as though very very few companies can maintain production based on today's prices with cash flows generated (let us ignore asset sales and debt to finance drilling ). Is the inflection point when we cant have 3.6bcfd at today's prices ? I agree there has to be some correlation between ng and oil but how can we explain widely fluctuating levels per equivalent BOE,it is almost as though both dance to an independent drum beat but may influence each other.It also seems as though big chunk of ng demand will not shift to gas (since ng is usually cheaper per BOE) and the oil demand needs oil and cannot shift to ng (or it would have).Am guessing wildly here but perhaps a very very small percentage of demand really has the choice to go oil/gas. LNG is definitely a key element in relative price of ng and oil but wouldn't it be a while before lng can be substituted for oil (in a meaningful portion of oil demand)? -cmakam
  2. How are oil/ng properties priced ?How much of impact does the forward curve have on pricing. We keep hearing higher cost producers are driven out,but at the same time we also hear of new technologies allowing drilling at price du jour from individual operators. Is there so much capacity and so much capacity waiting to come online that absent a demand trigger we will be in todays price territory for a long time ? There is a depletion curve but it appears as though sufficient capacity coming online today at today's prices to counter the decline and some ?How long before incremental demand is more the incremental production -- 2016,2017 ? Am asking these questions mainly to get a discussion going,in my opinion neither investing nor commodities allow meaningful discussions with precision but maybe there is a clear point where things are out of whack:)? -cmakam
  3. There is a lot of brain power in this board with expertise in this area,so: Given the state of the world today,which is the better investment-natural gas or crude oil ? 1)Both are depressed relative to recent past 2)Natural gas is somewhat more local relative to crude oil 3)Per BOE natural gas is cheaper (what is the right (relative) parity level given state of the industry today?) 4)Will new technologies like liquified NG bring about a different level of parity in relative prices,given the substitution impact of liquified natural gas? 5)Which market is over supplied relative to demand ? 6)What is the most logical way to think about the better investment opportunity? -cmakam
  4. Is any data available on break even points (based on gas prices) at various production geographies (Marcellus,Eagle ford,Spirit River etc) ? Is any data available on drilled but not connected wells?How big of a factor could this be ?With more distribution capacity couldnt one expect more supply in hitherto unconnected places but with good economics? Given all the innovation/effeciencies in the space to make drilling worthwhile at prices du jour, it seems like the classic standing on toes to view the street parade (that Warren Buffet often talks about). Everyone seems to figure out how to make 10-15 percent on well cost only to have prices drop. The production drop in the Marcellus is obviously a big part of the bull case,is it fair to assume anyone with a lower cost of production than Marcellus will eventually to be uneconomical? -cmakam
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