Chesapeake Energy Corp (CHK)

[dwms07]

It's Gonna Get Freezing Cold!

If this keeps up, their is good chance that we could take natgas storage levels down to scary lows by April 2017. Natgas could easily spike $15 in New York during a small blizzard along the East Coast as it did last year!

Only 118 rigs targeting gas! If producers were to ordered rigs back to work tomorrow, I don't think there is enough tier #1, pad optimized rigs standing by ready to work! It might be March before newly produced natgas is delivered at the distribution points. We would not build storage until July or August! Rig counts must DOUBLE soon!

But the old crews have left the industry and are now working at regular jobs. Are they gonna rush back to drilling when it is -15 degrees below zero? I doubt it.

If oil does go to $60, there certainly will be a severe shortage of tier #1 rigs! To make matters worse, no one wants to drill with Tier #2 or #3 rigs--they are nothing more than salvage because they can not drill 10,000 foot laterals!

Demand for natgas exports is gonna skyrocket!

We will see $4.00 natgas in 45 days! CHK will hit $10! 2017 will be their most profitable year in the last 5 years!