Needless to say, I was right about a reason for selling.Basically certain misquided individuals thought the NGC would be a big positive. At the best it was always going to be a non-event. The price they got was never going to be very high. The value of their gas is the fact it will be so cheap on a cap ex and op ex per mcf. i.e A relitively few wells neede to service such a large resource. Economies of scale so to speak. I am thinking somethning like 25 cents mcf to produce--not sure what transport will be but given short distance and high flowrate, you are talking all in prod and trans costs in the 50 cent range. Therefore if they are able to clear 2 ollar us netback or 2.50 plus mcf canadian, that is fine with me---given the cap ex per mcf is so low.
Theefore the netback per mcf was neve going to be high. And iditos out there convert gas to BOE for some reason and needless to say netback on oio are always alot higher than gas, in a more normalize 50 dollar brent price.
I always though the price would come in at 2.50-2.80 mcf range, and given that the company isn't disclosing what it is, and empasizes the utility of the contract, clearly the price they will recieve doesnt sound too impressive.