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Birchcliff Energy Ltd T.BIR

Alternate Symbol(s):  BIREF

Birchcliff Energy Ltd. is a Canada-based intermediate oil and natural gas company. The Company is engaged in the exploration for and the development, production and acquisition of oil and gas reserves in Western Canada. The Company’s operations are focused on the Montney/Doig Resource Play in Alberta. Its operations are concentrated in the Peace River Arch area of Alberta. The Company has a 100% working interest in its Pouce Coupe Gas Plant and two oil batteries, as well as various working interests in numerous other gas plants, oil batteries, compressors, facilities and infrastructure. Its Pouce Coupe Gas Plant, which is licensed to process up to 340 million cubic feet per day (MMcf/d) of natural gas, is located in the heart of the Corporation's Montney/Doig Resource Play.


TSX:BIR - Post by User

Post by llerrad5on Sep 26, 2021 6:01pm
200 Views
Post# 33921266

Nat Gas and Europe

Nat Gas and Europe

1) Europe’s brewing energy crisis

The biggest short-term threat to the global economy.



The long-term outlook for natural gas production is bullish

Due to the astronomical increases in NG prices in Europe and Asia and the recent rapid price gains in the stocks of NG producers, the short-term outlook for the commodity and the associated equities would be bearish if not for the likelihood of a severe Northern Hemisphere winter. As it is, we view the short-term risk/reward as neutral, with high risk offset by high potential reward.

As an aside, we doubt that the short-term reward potential is anywhere near as high as a recent Citigroup research note suggests. According to Citigroup analysts: “…there are likely to be [natural gas] price spikes and if unusually cold weather boosts demand and hurricanes in the U.S. Gulf of Mexico disrupt supplies, cargoes could trade in the $100 per mmBtu range, or $580 a barrel in oil-equivalent terms…“.

Also due to the astronomical price gains that have occurred this year, the long-term outlook for the global average NG price is now bearish. However, the long-term outlooks for NG production and the companies that can take advantage of the world’s need for more NG are unequivocally bullish.

The companies that are best positioned to take advantage of the world’s need for more NG are those that produce the commodity and those involved in transporting the commodity across the oceans. Only the latter (e.g. GLNG) are good candidates for new buying near current prices. The former are good candidates for profit taking, although it would be a good idea to maintain core exposure.

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