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Gold/Mining/Energy : Big Dog's Boom Boom Room

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To: ChanceIs who wrote (75609)	11/27/2006 8:55:55 PM
From: Frank	Read Replies (2) of 206135

Chancels-- we are on the verge of a great awakening in the NG world. The weather has camouflaged the situation for several years and may do so again this winter. But the tide is turning steadily as the relentless nature of depletion takes a grim toll on production. I point you to these emerging trends: (1) Canada's NG problems are a growing storm as depletion pounds away, short term oriented operators lay down rigs and the maw of oil sands production prepares to swallow any new NG. The new pipelines from the north will be sucked dry by the time they reach the U.S. border, (2) Europe and Asia will be increasingly desperate for NG/LNG. Those who say that "storage" is high in Europe should look at volumes. A six ounce glass of beer is not a firm basis for a party.And how would you like to depend on Russia in the face of North Sea depletion ? (3) we are approaching a cliff in GOM NG production as the impact of losing 25-35 high quality jack-ups begins to appear in the numbers. What do the analysts say about this sea change in drilling patterns ?- absolutely nothing. (4) the paltry increase in land production is most frightening of all-- every rig turning, system running flat out. Yet we only inch forward. And where are the 300 rigs Simmons guy said will show by Xmas? How about 40 ? (5) WS has forgotten that we had two draws last summer and one can expect more this July/August as virtually all incremental electricity demand must now be met by NG generation. (6) ethanol production will add several hundred BCF of demand this year and if the Dems get their way ethanol will consume well over 500 bcf by the time the freshman class at your local college graduates. I have been doing my own calculations and my thought is we end winter at about 1500 bcf in March. Then the real music begins as we struggle to reach 3000 by 11/07 and only price gets us there. Weather can still delay the inevitable but this game is over, we won.There ain't enough NG -By January, the YOY "glut" will be gone. Then what will CNBC say? - Frank

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