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45 comments on TOD POLL: Where Will Natural Gas Close a Year From Now?

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homebrew on January 1, 2008 - 10:51pm Permalink | Subthread | Comments top

Where is this huge natural gas crisis everyone was talking about just a few years ago? (on this site and others) Oh I know, it's NEXT winter, not this winter, but NEXT.

http://www.fromthewilderness.com/free/ww3/062303_nat_gas_crisis.html

http://www.energypulse.net/centers/article/article_display.cfm?a_id=324

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fireangel on January 2, 2008 - 1:31am Permalink | Subthread | Parent | Comments top

Good reminder homebrew. I dont think you get the point. There is so little difference between a crisis and total lack of one according to this market. If we were 400-500 BCF lower in storage right now, which is 7 days worth of average usage throughout the year things would look gruesome. So effectively 1% of a our yearly usage out of the equation can create ripples. I am betting gas production goes down 5% this year. My price forecast for the years highs is $12-$18.
I am betting the farm with canadian natural gas drilling trusts and peyto energy trust.

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westexas on January 2, 2008 - 7:56am Permalink | Subthread | Parent | Comments top

A NG insider years ago told me that the difference in North America between a NG glut and a shortage is 2%.

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MetaMeme on January 2, 2008 - 10:03am Permalink | Subthread | Parent | Comments top

A NG insider years ago told me that the difference in North America between a NG glut and a shortage is 2%.

Doesn't that apply to almost any key stuff that people use? Water, food, motor fuel.

You either have 'enough' ... or not! It's almost binary.

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sorry on January 2, 2008 - 9:07am Permalink | Subthread | Parent | Comments top

I agree about Peyto, I bought it in increasing numbers from 23 down to 16, against the rules to average down but I have a soft spot for them (and the dividends) I have not found a more reasonable company.

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Nate Hagens on January 2, 2008 - 9:47am Permalink | Subthread | Parent | Comments top

pls explain

why are you 'betting the farm' by investing in a trust? there is no equity upside in a trust if nat gas skyrockets -just higher dividends, yes?
If you wanted to bet - buying some small EP names or nat gas futures would give you a higher return (with higher risk, true)

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fireangel on January 2, 2008 - 10:50am Permalink | Subthread | Parent | Comments top

I also own 1 mini NG futures 2012.
Peyto is being valued at less than $10 a barrel of oil equivalent in the ground. I expect by 2010 oil will be at $200 and NG will be at parity or about $35. Peyto could easily go up 10 fold in this time frame. Plus it will at point be paying out yearly dividends close to current share price. I get paid to wait and I think its appreciation will outperform GAS/OIL E and P's. A lot of the gas only E and P's trade more closer to NAV than Peyto. If you look at Peyto's discovery record it beats almost any E and P company. Plus I am betting on a reversal of Canadian trust rules. So Peyto has a lot going for it and I get paid to wait.

That may be a $17 a share trust. But it started out just a few years back at 9 cents. I dont think many E and P's can beat that.

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rogue on January 2, 2008 - 2:16pm Permalink | Subthread | Parent | Comments top

please email me privately at rogue@rogueriver.net.

I would like to ask you a couple of questions.

Thanks, Blair

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nh3 on January 2, 2008 - 11:04am Permalink | Subthread | Parent | Comments top

why shouldn't higher dividend expectations affect the share price of a trust?

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fireangel on January 2, 2008 - 11:11am Permalink | Subthread | Parent | Comments top

The drilling trusts are even a better bet. Just picked up one the other day. Current dividend yield was 40%!. So market does not expect it be sustained. I do.All it has to do is sustain is divi and I think I will beat most E and P's.

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sorry on January 2, 2008 - 11:59am Permalink | Subthread | Parent | Comments top

Although it is OT, would you be willing to unveil the name of your drilling trust?
Thanks

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fireangel on January 2, 2008 - 12:49pm Permalink | Subthread | Parent | Comments top

Builders energy trust. I bought it for 2.97 a few days back.It has had a nice rally to 3.60. 72 cents current dividend. My only concern was whether they can survive this downturn. If they do then and I think they will then it was extremely compelling at that price. Plus tangible book value was $4.50.
Available OTC here if you interested. Trailing dividend yield is about 40%. I expect that to be paid in 2008 and 2009 although current divi is lower.

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Retsel on January 3, 2008 - 2:03pm Permalink | Subthread | Parent | Comments top

Well, the New York spote price for natural gas has done some pretty bizarre things. Right now it is listed as 16 dollars per million BTU over on Bloomberg, which is over twice the future and Henry Hub price. It has been swinging from $7 to over $10 per million BTU for several weeks now, but the $16 price is the highest it has been on the New York spot market.

Retsel

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45 comments on TOD POLL: Where Will Natural Gas Close a Year From Now?

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