APA is finally getting some of the recognition it's has deserved for the last several years.
My guess is APA takes over from APC this year as the institutional favorite.
Raymond James is now prediction the next NG crisis this winter:
APA is by far the best managed company in the patch. Production grew by 30.29% in Q4 over Q4 2001, and leverage is down to 33.6%. Not an easy tack for a company the size of APA.
Keep your eye on APA. When it turns, the next up cycle will begin in XNG stocks.
We Will Run Out of Natural Gas Next Winter
Regardless of where storage ends the injection season, we believe there is a very high probability that winter-ending
gas storage (in 2003) will fall well below 1,000 and push gas prices through the roof. As shown in the
table below, we have outlined three different scenarios for 2002/03 winter-ending gas storage. Note that in our
high case (which assumes another record warm winter) storage ends up well below 1,200 Bcf. In the more
likely cases where weather trends back toward normal, implied storage would end at untested lows.
Conclusion
While the near-term natural gas outlook remains clouded by weather and market psychology, it is apparent
to us that the U.S. will be in the midst of another full-blown natural gas crisis within the next 12 months. We
can all argue about the exact magnitude of year-over-year gas supply changes, the size of year-over-year
industrial demand increases, and the impact year-over-year of weather. If we combine the likely impact of all
three, however, our numbers suggest there is a very high probability that gas prices will have to increase
sufficiently next winter to squeeze out demand (see gas prices in the winter of 2000/2001)
Jim |
