VOL: 1 ISSUE: 11 JULY 15, 2003
Editor’s Corner
Our subject this month is natural gas.
Mr. Greenspan's comments of July 10 bring this item to top of the bone pile.
After hearing Mr. G's remarks, our old friend the OT had this to say “Well, sprout, I thought you had gotten too far out in front last December when you told me and all your folks about PGH---but it looks like that's working good so far, I kind of like getting those checks every month. So tell me, have you got any pictures for me to look at?”
GB: I have one that tells the whole story.
OT: That's what I like--short and sweet.
 OT: That’s real nice, but my friends in the oil patch tell me that the pinch doesn't come until the consumption rate pushes past the deliverability rate by an amount that puts pressure on storage deliverabilities as well as storage capacity.
GB: Well, my aged amigo, I thought you told me just a few weeks ago that some of those same friends had sold gas @ $8.71 /mcf when the Merc price was below there.
OT: You Know, junior, I do believe you are starting to catch on. The spike in prices last winter, field prices above Merc, continued higher prices into the summer, these are strong indications that the time is now, the only caveat that comes to mind is to have a very mild winter or two could delay the inevitable.
You tell me something young fellow, back when you were in the biz in 1980 or so, didn't they build some LNG tankers and ports?
GB: Yes they did. And they built several receiving terminals. The cost of this operation could only be justified by $10 gas. I doubt that it would be any cheaper 20 yrs. later. Mr. G says there are no short-term solutions and that LNG is the way to go.
OT: OK, so what do I do about it?
GB: You can do anything you want to.
OT: Don't get sassy, whippersnapper.
GB: Well, you might add to your PGH or you might look at another Canadian gas producer that has been a common stock and is just now converting to unit trust income mode.
OT: Does thing have a name?
 GB: Peyto Exploration is changing to Peyto Energy Trust PEYUN.TO
The TO means it is listed on the Toronto Exchange.
OT: You have any backup for this stuff you're spewing out your pie hole today?
GB: Visit www.hubbertpeak.com/gas/ (Natural Gas),
Visit www.eia.doe.gov (Department of Energy) and more stuff than you can digest!
That’s why we give you….
THE BOTTOM LINE!
* The Blake Institute For Mental Sanity Through Financial Gain
our motto: “Fewer Trades---More Profit”
P.O. Box 1319, Zapata, Texas 78076 (956-765-3595)
Natural Gas
“Canadian gas exports have long been viewed as a reliable and
stable source of natural gas to the U.S. However, recent shifts in
Canadian drilling activity, well decline rates, initial well production
rates, and gas demand should materially limit the amount of excess
production available for export to the U.S. In essence, lower natural gas
flowing from Canada means less natural gas for the U.S. If we take the two spectrums of our estimate of 1 to 1.5 Bcf/d in lost exports, we anticipate that the U.S. may lose 1.5% to 2.5% of overall gas
supply (or between 350 Bcf to 500 Bcf of available gas to inject into
storage next year). This lends further support to our projections of an average natural gas price of $10/mcfe (or a 7:1 ratio with light
sweet crude) in 2007. As Canadian gas production stagnates and with U.S. production on the decline, the tightening of the North American gas market should be a bullish long-term driver for gas prices."
Article Courtesy of Raymond James
© 2006 Zapata George Blake
CONTACT INFORMATION
Zapata George Blake
956.765.3595
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