Reply With Quote
um, thanks?
God bless you too.
FWIW.
Standard yes, but the "tone" is very indicative of other things.
I think of it as a symptom with varying underlying causes. Autocratic CEOs have baaaaad track records. Any whiff of that and my skeptical radar gets a few extra watts...
um, thanks?
God bless you too.
FWIW.
Good article. Thanks for the link. I've been wondering if this boom was real. Some guys paid a friend of mine $3000 an acre just for the RIGHT to drill on his place and will give him 25% of production after they drill/produce the wells. Some HUGE money changing hands down there...
Smells like a real estate bubble.The landman offered Vargson $100 per acre, plus 12 percent in royalties. He told her there was no way to predict how big the royalties would be, but emphasized that she stood to make "a lot of money" over the 30-year life expectancy of the well. Vargson accepted the deal. "We thought we were taken care of," she says.
Drilling, which began the next year, was an immediate nightmare. One morning, Vargson woke up at 6 a.m. to find 18 trucks idling in her driveway. The hillside behind her house was leveled for a drill pad, and the rig went up 500 feet from her back door. Once the fracking began, water trucks made hundreds of trips up and down her driveway, while air compressors roared all day and night. When the gas was flared off before production began, the flame was so bright in the night sky that she could see it glowing red on the horizon 12 miles away.
Vargson noticed not long after production began in 2009 that water in the trough out back stopped freezing on cold nights. Inside the house, the faucet began to sputter and spit. Her husband seemed to have a lot of headaches, and Vargson felt nauseous if she stayed in the shower for more than a few minutes. Acting on a tip from a friend, she had her water tested. It was loaded with methane.
"I discovered I could light my water on fire," she says. "And I still can." To demonstrate, she walks over to the faucet in her kitchen, lights a match and turns on the faucet. Whoosh! A flame shoots out like a blowtorch.
Vargson stopped drinking the water after she discovered the methane – but tests showed that her water also contained elevated levels of toxic chemicals like radium, manganese and strontium. Chesapeake agreed to supply Vargson with fresh drinking water, delivered to her door in five-gallon jugs once a month, but it denies any responsibility for the elevated methane levels. Tom Darrah, a Duke geologist who has examined Vargson's well for a new study, finds that difficult to square with the facts. "Anyone who has seen the data I have and thinks this much methane in her well is from natural sources has their head in the sand," he says
I hope your friend got some solid contract provisions in for protection of water and other environmental mitigation.
NEW YORK | Wed Mar 14, 2012 12:33pm EDT
(Reuters) - U.S. natural gas futures fell 1 percent on Wednesday, hovering just above Tuesday's 10-year spot chart low as mild weather and swelling inventories weighed on prices.
Despite some short covering late on Tuesday which pushed prices higher, the market fundamentals remain bearish as record high production continues to outrun demand.
Front-month April natural gas futures on the New York Mercantile Exchange were at $2.269 per million British thermal units at 12.08 p.m. EDT, down 3 cents.
On Tuesday the contract slid early to $2.204, the lowest price for a front month since February 2002, before ending the day up about 1 percent.
"The fundamentals are bearish," said Tom Saal, analyst at INTL Hencorp Futures in Miami. "But, it is maintaining its strength above yesterday's floor."
Gas in store is more than 40 percent above the norm after one of the mildest winters on record reduced demand nationwide, while prolific production from shale plays continues to swamp the market.
Mild weather is set to add pressure on prices on the coming days, forecasts show.
In the cash market, gas bound for the NYMEX delivery point Henry Hub in Louisiana was heard late near $2.13, down 2 cents from Tuesday's average of $2.15 and at its lowest mark since September 2009.
Early Hub cash deals also eased to about 15 cents under the front month contract, from deals done late Tuesday at about a 9-cent discount.
Gas on the Transco pipeline at the New York City gate was heard early near $2.22, down 4 cents from Tuesday's $2.26 average and also at its lowest price since September 2009.
STORAGE OVERHANG A PROBLEM FOR PRICES
Inventories are expected to show a withdrawal of 57 billion cubic feet when weekly data is released early Thursday, a Reuters poll of industry traders and analysts showed on Wednesday. This week last year, stocks fell by 60 bcf and the five year average decline for the period is 79 bcf.
Withdrawal estimates for this week's EIA report range from 45 bcf to 73.
With no extreme cold on the horizon, stocks are likely to end winter at an all-time high of 2.2 tcf, well above the previous record of 2.148 tcf set in 1983.
The cushion could also spell trouble for prices late in the summer stock-building season if storage caverns fill to capacity and force more supply into the market.
OUTAGES, CUTS COULD HELP TIGHTEN MARKET
Nuclear plant outages were running at about 19,600 megawatts, or 20 percent, on Wednesday, up from 15,800 MW out a year ago and a five-year outage rate of about 15,200 MW.
Traders said the outages could add more than 1 bcf to daily gas demand.
And planned output cuts by producers could trim 1 bcf per day or more from flowing supply.
Relatively cheap gas has also drawn more industrial use and prompted additional utility fuel switching away from more expensive coal.
But with production still running at or near all-time highs, few traders expect much upside in prices in the near term.
MORE FUNDAMENTALS
The National Weather Service six to 10-day outlook issued on Tuesday again called for above or much-above-normal readings for about the eastern two-thirds of the nation and below-normal readings only in the West.
Baker Hughes drilling data last week showed the gas-directed rig count fell for a ninth straight week to a 32-month low of 670.
The steady drop in gas-directed drilling has stirred talk that low prices might finally slow output.
Analysts agree it can take months for a slowdown in drilling to translate into lower production, noting the producer shift in spending to higher-value oil and gas liquids plays still produces plenty of associated gas that partly offsets any reductions in dry gas output.
A recent Bernstein report said the gas-directed rig count would have to drop to about 600 before it would be comfortable forecasting flat to falling production.
Most analysts, noting it will be difficult to balance the gas market without serious production cuts, do not expect any major slowdown in gas output until late this year.
Another excellent read for you guys that are interested:
http://www.nationalreview.com/articl...n-d-williamson
How do you get that?
He's a working interest owner. He has to contribute a respective share of the expenses accrued by every well he's participating in. I don't see what fails your smell test?
The sports sponsorships, the box seats, etc. the map sale that was forcibly reversed etc.
I guess one can make a fair argument that sponsorships and naming rights to stadiums are "good advertising", but it smacks to me of an ego play.
On the other hand, such things do enable "wheeling and dealing" that is the lifeblood of large businessness.
I have seen first-hand the results of CEOs being a bit generous with company money, so I tend to be a bit sensitive to such things. It is VERY easy to get into "It's good to be the king" mode, if one is not careful.
Variable.
Interest.
En ies.
Fair disclosure:
I have never read through a gas company financials.
Maybe this kind of transaction is par for the course. I think it provides a bit too much opportunity for some less-than-arms-length transactions.
The rather lengthy sections on partnerships and debt and so forth also raise the specter of a potential s game.
I would not go out on a limb and say it is definitely rife with fraud and smoke and mirrors. The complexity of the company should worry investors and creditors. As a common stock holder, I would be leery of a company that issues too much preferred stock, as this one has had to do.
, their empahsis on production, and the fact that they have a readily tradable commodity is a good thing that might save their bacon.
If the LNG export terminals can come on line before their big debts come due, US gas producers can find a ready-made export market in Europe, who would LOVE to be able to tell the Russians to off.
That would definitely raise demand for US gas, as would Chinese/Indian demand.
I don't think prices will stay low forever.
There are currently 1 users browsing this thread. (0 members and 1 guests)
Posting Permissions