It would appear that at this time the actual fundamentals of supply and demand are not the main factors for dictating the price of oil. Instead, it seems that investor sentiment, emotion and our thoughts of where oil prices could be, would be or should be is the underlying reason. Things have been tough for us SGY shareholders and other oil & gas stocks lately. It's frustrating watching the share price drop as oil hovers at or near the $100 mark.
My understanding tells me that oil prices should remain high because of a bullish physical market and low world oil inventory. SGY and other oil plays are going to have an abundance of free cash and dividends will increase or special dividends will be forthcoming to shareholders. Share prices, in my opinion, because of the market perception, might remain at their present level for a little longer.
For us SGY shareholders, now is not the time to doubt the fundamentals of supply and demand. I know we've been looking ahead for some time now... but know that there is real value in SGY. Keep in mind how much FCF Surge Energy is generating at today's price and that SGY has a wealth of oil in the ground for years to come.
Oil is in a structural deficit due to underinvestment and it will most likely remain that way for for many years down the road. At this moment in time SGY is cheap... it's value will rise as the market disregards the sentiment and emotion and gets back to the fundamentals.