RE:RE:RE:Vermillion well positioned for new world economicsJust to clarify my statements, when I cited the pricing relationships, I should not have added the phrase on a BTU equivalent basis. The pricing relationships are merely a comparison of Crude prices per barrel to nat gas price per mmbtu..The original 6.3 ratio was a comparison related to heating values .
Oldnagger wrote: The 6: 1 rule was based on the BTU value of a barrel of 60 API Crude versus nat gas. The actual value was 6.3 to 1
The 10: 1 rule was intended to represent the relationship between market price on a BTU equivalent basis. Using today's prices in the US the ratio would be 15:1, In Canada it would be about 20: 1 and in Europe it would be About 2.7 to 1
Obviously Canadian nat gas is seriously undervalued, so maybe that is where the growth may be expected longer term !!