trendI had a look at a price chart for PMT from inception... and I have to say... IF one was to extrapolate into the future... it isn't looking too good for folks hoping for a recovery...OF course I am not one to follow trend.. It's always been my premise that IF your following your loosing...Get ahead of what the herd is doing... and you are bound to make a few gains...SO... for those with active keyboards...Here IS my take..sure...sure... you believe I am here to bash your beloved PMT... BUT not really... simply I am here to counter your enthusiasm & optimism with what I hope you all can understand IS an objective opinion... I do NOT support buying, selling or holding... Advice says ONE thing... be more like me... and I think (and so does my wife) that one ME is plenty on this planet...
SO... companies currently drilling for NG... are doing so on subsidized cash... JV's with offshore (mainly Asian Nat co's) therefore drilling activity is NOW independent of NG prices.. as Shammy has pointed out... it doesn't make sense to be drilling with the price being what it is... UNLESS that drilling activity is NOT dependent on cash generated from sales... A by-product of NG liquids... is NG... So... while dry gas may very well be in decline...NG from liquids drilling will continue to rise... ASK anyone in or near Eagle ford how much activity is going on there... ONE word BOOM!...
AND it gets worse... ENCANA, Tourmaline, et al here in Canada have recently executed JV agreements to begin development of their "dry gas" plays... with Nexen and several other companies... openly advertising that they too are looking for partners to defray their DRY gas production... So... all this points to ONE thing... Billions of CF/day are going to be sitting behind the pipe... waiting for any burp in price... there are those that believe that low NG is a short term situation... BUT I dare you to define "short term"... 2 years? 5 years? 10 years? Have a look at what the senior producers are forecasting... Cenovus(not my favorite company... but certainly a bellweather for "trends") are forecasting Sands production ramp up to 500K BOE/d within the next 10 years... the magic number here is 10 YEARS...YEARS senior companies... plan in advance of 10 years... not 5... not 2... for those companies 10 years is NEAR TERM...
How about taking sales off shore??? not within the next 3-5 years...the infrastructure just is not there yet... with companies like Apache, building NG liquid loading facilities...and ships to carry that production asking for upwards of $120k/day & A backlog in orders at the ship yards capable of building those transport ships... how likely is it that a junior (or intermediate) producer is going to get space or any throughput on those sales lines?
SMALL NG producers are all feeling the noose...O&G companies rely on "profit" to fund drilling activity... PMT has "game changers" but with debt to service, natural production declines, along with reduced drilling for NG, and really LOW pricing... where IS PMT going to come up with PROFIT? AS I wrote... this is NOT just PMT's problem it is the problem of plenty of "dry" NG producers...
See the trend for what it is... the trend IS that junior (and some intermediate) producers simply will not be around in their current corprate clothing by next year... Do with that what you will
It's MY opinion git yer own.