Scott,
Since I don't operate, I don't have control over the amount of NG produced from each well. I will say that it is dangerous to over produce a NG well, and in some cases and if it done the operator could be held liable if the well is lost. I don't believe any of that is going on in the patch. You always want to produce a well at a rate which recovers the maximum amount of reserves over the life of a well and their are several theories on what is the best way to accomplish that.
As far as which NG stocks to short, most have already had a sizable move down. In NG stocks, I was short XTO, POG, BR, EOG, APC, MHR, COG and KWK. I still like KWK, APC, PENG, BR and COG as good shorts today.
In oil service, I was short UCO, CLB, SII, WFT, PHEL, CAM and HAL. I still think UCO, SLB, BHI, WFT, CAM and HAL are good shorts today.
As far as time frame, I would continue to hold the shorts until we see a change in the fundamentals in oil and NG builds. I think there is a long way to go on the down side.
Longer term, I'm very bullish and hope to play the next up cycle. I do believe we will see shorter cycles as the world energy markers get tighter, but we will still have cycles.
Good luck,
Jim |
