Natural Gas Commentary

Feb 13 2009

Published by Ian R. Campbell at 4:34 am under Natural Gas see Legal Disclaimer.

An article yesterday proclaimed ‘Natural-gas producers’ prospects remain iced-in’. It begins by saying that “while more than a month of the cold season remains on the calendar, the most lucrative period of increased residential and business heating demand has mostly ended for natural-gas producers, with historically high stockpiles on hand”.

U.S. natural-gas supplies are said to have stood at 2,020 billion cubic feet this past week, or 44 billion cubic feet more than last year at this time, and 24 billion cubic feet above the five-year average. The article says that companies are drastically slashing their capital budgets for the coming year and shoring up their balance sheets as cash reigns, and that:

• ”For the most part, what you see happening when you see the cutbacks [is that] people are not drilling as many wells, and so the overall production volume of the country will gradually decline”; and,

• ”Companies have to cut back if they find the economics on their projects won’t be supported by current natural-gas prices, and that’s the case in many situations today. In addition to that, if they also happen to have a lot of borrowing then they find it to be an extremely difficult time”.

Goldman Sachs is quoted as saying ‘While we are not calling a V-shaped bottom in natural gas at present, we believe we are moving closer to a bottom.’

Read the article by clicking here.

See Blog Legal Disclaimer

Save serious time researching more than 1,600 Canadian Mining and Oil & Gas companies.

Free subscription, click here!

Possibly Related Posts: