DEUTSCHE BANK SEES 'GAS GLUT,' BASICALLY DOWNGRADES NORTH TEXAS
From the Exxon research note:
"We have been unable to understand how the XTO deal generates an accretive return for Exxon Mobil, with the company providing basic information on the near term dilution of the deal, but only vague outlines of how much costs can be lowered, as well as an increasingly stated view that gas prices will recover from current low levels. Originally the deal was specifically described as 'not a gas price play.' We believe accretion is absolutely dependent on better US natgas prices, as XTO's costs are best-in-class and cannot be greatly lowered. Today we are cutting our US natgas price forecast to below strip levels, which at this time we believe will not make XTO an attractive deal."
Deutschebank is one of the pre-eminent research firms for natural gas. This is a powerful downgrade.
Did you read that folks?
We have a GAS GLUT
There's no need to rush. The only rush is industry trying to get holes poked in the ground before more strident regulations come down the pipes. So, let's slow down and DRILL RIGHT TEXAS: Best oil & gas development practices for Texas
About Sharon Wilson
Sharon Wilson is considered a leading citizen expert on the impacts of shale oil and gas extraction. She is the go-to person whether it’s top EPA officials from D.C., national and international news networks, or residents facing the shock of eminent domain and the devastating environmental effects of natural gas development in their backyards.
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Coincidentally… I'm getting anecdotal reports of a Greed Glut.
Coincidentally, I'm getting anecdotal reports of a Greed Glut.
In other related news….Executives from energy giant Chesapeake were given a healthy dose of a new pill called "reality" when it was reported that gas futures would remain low through 2011. Aubrey McClendon was quoted as saying, "We're not at all worried about the low gas prices, we have some of the best business minds (Ed Ireland) working on it. I have been told that we will be able to 'make it up in volume'."
We've gotta go to some other source of energy–NOT natural gas! Think about the choices, there are several!