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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: tradingfaster123 who wrote (99888)	4/27/2008 4:36:17 PM
From: Ed Ajootian	Respond to of 206131

tradingfaster, thanks again for your thoughts. I believe the point about rig counts being correlated to production is that its necessary to lag the rig counts about 6 months or so in order to get much of a fit. So 6 months from the 8/07 gas-directed rig count peak gets you out to around February for a US production peak, let's see how close this ends up being to reality. The reason for that much of a lag is that these Barnett Shale wells have to be frac'd and that takes time, plus the well then usually needs a few months to clean up before it starts really cranking. I hear you about robry's data not tieing in exactly to other official sources, but as you say the real benefit to much of his data is the degree to which it changes over time percentage-wise. Also, I believe his baseline calcs. are pretty accurate, although I have no way of proving this of course. I don't see it being a case that NG is becoming scarce here, but rather that it is becoming more expensive to find and develop it. Other than the core Barnett Shale play, most of these resource plays need $7.50+ gas to generate a 15% IRR. Regarding Canada, I believe we are just starting to see the tide start to turn on Canadian imports. From a discussion that took place on this board a little while ago, it appears that they pulled down storage quite a bit this winter, and that was the only way that they were able to maintain the level of exports into the US. That cushion has obviously now been taken away.