Kelt Exploration Ltd T.KEL

Natgas amateur comment

[PabloLafortune]

So the EIA storage report out today up 118 Bs compared to last week, within expectations. Thing is, for most regions the increase was similar to '22 and '21 ie Supply is much higher but so is demand.

Storage went up 800 B's in Q3 '22. 

Q2 drilling (which I assume is Q3 turn on line) will be about the same as '22 with less completions on top.  Last year production was up 300 Bs quarter over quarter. This year will probably be a lot less than that because producers will be bringing in less wells on line and the production decline those new wells have to compensatefor will probably be greater in '23 than it was in '22.

Also, on this date Freeport caught fire and was shut down the rest of the year. I believe it consumed 2 Bs a day? So looking at another 200Bs increased consumption from June 8 to September 30.

Finally, natgas has taken significant share from coal for power production which has significantly increased natgas consumption. That increase should go up some more this summer with the warmer weather.

There are other variables - LNG, wind, weather - which seems even more of a crapshoot if you ask me.

Anyhoo, by the time end of September rolls around, natural gas storage in the US should be in a much better situation compared to to '22 or '21 versus where it is now. Your Mileage may vary.

[PabloLafortune]

To simplfy further, I compared natural gas storage in 2023 versus 2022 adjusted for the Freeport shutdown. I adjusted 2Bx per day for 270 days. As it turns out, natural gas storage ex Freeport would be identical in 2023 that it was in 2022. Of course that still leaves a 540 B overhang.  2nd point, the mild winter had a short term impact not so much on storage (ex Freeport) but on prices

[Seppelt]

Let's make it simple. You need a hot summer, especially in the most populous states and states that have a large installed capacity of nat gas plants, for instance, TX, FL, CA, PA and OH or Midwest in general. Lower injections during the summer will set a stage for possible recovery in the winter, otherwise prices will be hopelessly lower for longer. Currently, it's cool everywhere and

[Seppelt]

Another important factor is production in the U.S. Some of the recent growth came from the Permian which is mainly associated gas. Regardless, producers need to cut the output if there are any hopes for storage coming down to average levels. Rigs drilling for gas have been falling recently so there is hope that production will fall but so far it is keeping near record highs. 

[PabloLafortune]

Z4 energy seems pretty accurate and is saying 95B injection in next week's report same as '23.  Mind you the EIA report is based on previous Friday end of day so it goes without saying that most pundits are going to be pretty accurate one week out. We should keep in mind that Freeport shut down pretty much a year ago. We've been IMO balanced since end of February (YoY). During