Chesapeake Energy Corp (CHK)

[ogbull]

Tidbits on NatGas

Gas exports to Mexico continue to grow. In fact, exports to Mexico have grown for five consecutive years and ran above seasonal highs last year. Experts are predicted to climb 5% this year.

Gas producers can’t shut down a well and just turn production back on. The activation time to be back up and producing is posted in the report as six to nine months from what the analyst calls the “time zero” capital decision. Hardly like flipping a switch.

The top producing areas, like the Marcellus and Utica shales, are becoming pipeline short. The analysts note that there are limits on pipeline evacuation to the demand centers, which has created what they call severe bottlenecks. The future for new evacuation is murky at best, it appears.

While this is the work and thoughts of a single firm, one thing is for sure. By the time others on Wall Street see the move and make a bullish call, it will be long after the natural gas has left the $2.20 spot price station. Jefferies feels that prices can reach $3.50 to $4.00 by later in 2017. The wild card is also weather--we are heading into the hottest summer on record.



Read more: 8 Real Reasons Natural Gas Could Skyrocket Over the Next Year - 24/7 Wall St. http://247wallst.com/energy-economy/2016/04/28/8-real-reasons-natural-gas-could-skyrocket-over-the-next-year/#ixzz49ZkDCWpV
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