GREY:BNPUF - Post by User
Post by
MyHoneyPoton Dec 22, 2017 4:05pm
239 Views
Post# 27219011
The end is near
The end is nearI think the gas market is getting destroyed by company’s pursuit of Liquids. The pursuit of liquids is being done with no consideration for gas, and a gas price of 1.00 worked into the equation. The basin’s best wells are high liquids with little gas. The gas only companies are now being forced to a cashflow sustainability mode. The banks don’t want to eagerly finance these companies, so they are moving debt from the banks to private lenders/secondary markets and paying much higher prices. Bank debt is more around cash operations and Long-Term Debt is in the secondary markets. (PPY, BXE, NVA examples) So production growth with out a LNG terminal will not happen, pure gas companies can not grow production and will eventually implode. IMHO, the economics are not good enough for any pure gas investment thesis at these low prices. It will get harder because more heavy oil needs more condensate and Canada is importing condensate at high prices, a premium to WTI. So for now the future and the NOW is condensate, and there is a made in Alberta condensate market that is not impacted by free trade, Nafta, a border tax which makes it low risk. Since the third quarter condensate has been trading at a premium at prices as high as 80 dollars Canadian in some cases and liquids rich companies are getting more then 70 percent of their revenue from liquids and natural gas is something you just want to flare off says Jim Riddel the president of Paramount resources. The gas market is dead unless we have a change in government, and Dryer Gas Companies are lame horses waiting for someone to put it out of its misery, I took my tax loss hit on ppy and have moved on to liquids companies with real substantial cash flow (NVA, Seven Generations, and Paramount), this gas stuff is for the birds and will go up in a puff of smoke. IMHO.