NG MARKET MONITOR | July 09, 2019

Nobody is Generating Free Cash Flow

On June 26, the Dallas Fed has released its latest energy survey. The quarterly publication has a sample size of approximately 200 E&P and support service firms across Dallas FED’s service area. The questionnaire includes standardized inquiries about business conditions, along with one-off “special questions” and a comments section. Conducted between June 12-20, the survey paints a pessimistic view of the E&P and service sector’s future. To quote an E&P executive who provided comments, “it looks.....

EARNINGS CALLS | May 31, 2019

May 31, 2019

With 2019 marking the year of ‘free cash flow’ optimization for producers, this quarter was the first glimpse into how producers were adjusting to stricter CAPEX budgets and changing shareholder expectations around production. The Anadarko Petroleum takeover loomed large over this quarters’ calls with analysts poking around to determine “who’s next?” On a play-by-play basis, negative gas pricing in the Permian made associated gas a focus this quarter and recent announcements from Midcontinent .....

NG MARKET MONITOR | May 17, 2019

CORRECTED: U.S Natural Gas Trade - May 2019

CORRECTION : Figure 3 (“ PEMEX Production Levels”) in the original report contained inaccurate data. This update corrects that error. No other changes have been made. Please note that the next issue of “NG Market Monitor” will be published in early July. Canada: Export capacity and mitigation of AECO pricing disconnects remain a top priority for many large Canadian gas producers, while for smaller producers AECO disconnects have become an existential threat… LNG : Camero.....

NG MARKET MONITOR | May 03, 2019

May 2019 Commentary and Balances

The most recent issue of the Natural Gas Monthly released on Tuesday contained a surprise: flows through Roma, TX into Mexico have been revised starting July 2018… So far cooling loads have been disappointing and the 15-day weather outlooks paint an extremely mild weather picture. Remarkably, we still saw the share of coal-fired generation collapse across most ISOs… Despite the time lag, coal data through February remains highly relevant to spring and summer analysis as over 90% of subbitu.....

NG MARKET MONITOR | April 22, 2019

U.S Natural Gas Trade - April 2019

LNG : With Cameron introducing feed gas at Train 1 and Kinder Morgan announcing last week that Elba Island will be producing LNG from the first of ten modular units by May 1st, the fourth and fifth U.S. L48 LNG export facilities are expected to be producing commissioning volumes next month. This spring and summer are set to see an unprecedented 3-4 large scale LNG trains producing commissioning volumes for a total of up to 2.5 bcf/d of feed gas capacity (Cameron Train 1 and Train 2, Freep.....

NG MARKET MONITOR | April 07, 2019

April 2019 Commentary and Balances

A Growing Market, A Technological Revolution A report from January became relevant this week when natural gas prices in west Texas turned extremely negative: on January 24, the Environmental Defense Fund published an analysis about Permian flaring rates using NOAA data and concluded that across the basin, operators going back to 2017 were flaring as much as twice the volume that was reported to the Texas Railroad Commission ( RRC )… On April 1, 2019, North Carolina Department of Enviro.....

EARNINGS CALLS | April 02, 2019

Oil and Gas Producers (4Q 2018)

“Organic” and “local” do not belong to the list of words commonly used in E&P earnings calls. Yet, both terms came up this quarter to describe changing attitudes towards supply and demand, respectively. Producers “living within their means” are lowering leveraged CAPEX , focusing on free cash flow, share buybacks, reducing costs and finding capital efficiencies in order to grow organically . And in certain cases – such as the Marcellus – they are also focusing on local demand growth to find .....

NG MARKET MONITOR | March 13, 2019

U.S. Natural Gas Trade and STEO - March 2019

With the extension of our balances to include Winter 2019-2020, this month’s report outlines our assumptions and discusses key risks going into next winter. • Guidance by the largest publicly traded Canadian gas producers suggests production will be flat year over year, however the North Montney Mainline expansion could create supply congestion on the Nova Gas Transmission system. • Bottlenecks and maintenance on Nova Gas Transmission could make it difficult to replenish Western Canadian in.....

NG MARKET MONITOR | March 05, 2019

March 2019 Commentary and Balances

The Natural Gas Monthly with EIA’s December 2018 balances was released on Thursday. Compared to the value derived from the weekly numbers, the inventory withdrawal for December was revised lower by 9 bcf. In our balances, the new data translated to an upward revision of 0.3 bcf/d in supply, most of it in production. While demand on aggregate was spot on at 95.6 bcf/d, the breakdown of consumption by component reveals significant challenges in forecasting Summer 2019 and Winter 2019/20 balances…

NG MARKET MONITOR | February 14, 2019

U.S. Natural Gas Trade and STEO - February 2019

Mexico: Last Thursday, FERC approved Valley Crossing’s in-service request. The 2.6 bcf/d project is the upstream portion of the Sur De Texas project. … Canada: New TC Energy (TransCanada) Mainline compliance tolls were filed and took effect on February 1st, 2019, despite outstanding concerns by Centra Gas and BP who believe the adjustments filed by TransCanada are understated… LNG : At the beginning of the month, FERC granted both Elba Island and Cameron Train 1 approvals to be.....