The Energy Report
Notable Quotes
"With the LOI signed, we urge investors to bolster positions in FCU." (12/22/15) Fission Uranium Corp. - David Sadowski, Raymond James More >
"FCU is taking the right steps regardless of whether PLS is ultimately acquired or developed into a mine." (12/22/15) Fission Uranium Corp. - Heiko Ihle, Rodman & Renshaw More >
"I am quite excited about POE in 2016." (12/16/15) Pan Orient Energy Corp. - Chen Lin, What Is Chen Buying? What Is Chen Selling? More >
"BKX's Oklahoma asset has significant value." (12/16/15) BNK Petroleum Inc. - Michael Charlton, iA Securities More >
"EFR is one of the few companies in a position to write long-term sales contracts and deliver into them at several times its current production rate." (12/17/15) Energy Fuels Inc. - The Gold Report Interview with Eric Coffin More >
Gas Is UGLY. . .NGL Production Levels Aren't Winning Any Pageants Either
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DARREN HOROWITZ, Raymond James
(03/09/2009)
"If you haven't heard enough bad news about natural gas, then our forecast for 2009 natural gas liquids (NGL) production levels could put you over the edge. Since the beginning of withdrawal season (11/1/08), average NGL production levels are down ~0.6 Bcf/d y/y due to declining refinery utilization and weak industrial/consumer demand for NGL feedstocks (consistent with depressed NGL margins). Last week, we lowered our 2009 oil/gas price decks from $60/bbl and $5/MMbtu to $43/bbl and $3.75/MMbtu, respectively, based on the deteriorating global economy and its impact on oil demand, as well as bearish natural gas supply/demand fundamentals perpetuating. Simply put, with limited visibility as to the timing/magnitude of an economic recovery and expectations for refinery/industrial demand to remain depressed, we are reiterating our estimate that NGL production levels will be ~0.5 Bcf/d less (looser) on a year-over-year basis (11/1/08 to 10/31/09). Due to declining refinery utilization and weak industrial/consumer demand for NGL feedstocks, NGL margins have remained depressed, and average NGL production levels are down ~0.6 Bcf/d on a year-over-year basis since the beginning of withdrawal season. Based on our new crude and natural gas price deck (revised last week), we expect that improved processing margins during 2H09 could increase production, thereby narrowing the year-over-year gas supply level from current levels of 0.6 Bcf/d to 0.3 Bcf/d looser. From a demand perspective, we believe refinery and industrial demand will continue to trend lower, thereby reducing NGL production by an additional 0.2 Bcf/d. Taken together, we are estimating that NGL production levels will be at least 0.5 Bcf/d less (looser) on a year-over-year basis (November 1 to October 31)." |
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