Natural Gas Outlook
As our 47-company 2Q04 survey shows, U.S. publicly traded oil and gas companies are now showing a 3.8% year-over-year gas production decline.
.........
lots of text, charts, NG drillers, and other stuff
.........
Conclusion
Our bullish North American energy thesis has been, and continues to be, centered on the underlying problem of falling U.S. natural gas production. Much like in the 1970s, when oil production continued to fall, regardless of how many rigs were drilling, we think we are nearing (if not at) a similar crossroads in the U.S. gas supply picture. Given the inherent rate of decline in U.S. gas wells today, combined with what is still a muted response to drilling activity, we expect domestic gas production levels to continue trending south for the next several quarters. While this trend will almost certainly be led by the majors, the independents may not be able to reverse it as fast as many people might believe.
While short-term gas prices and oil/gas price ratios should continue to be volatile, if oil prices remain near the $40/Bbl level, that would imply fair value for gas above $7/Mcf.
read the article here:
beacon1.rjf.com |
