【出版时间及名称】：2010年1月美国石油天然气开采加工行业研究报告
        【作者】：MADISONWILLAMS
        【文件格式】：pdf
        【页数】：32
        【目录或简介】：

SUMMARY
Is it over? Can we open our eyes? Although it sounds like we’re talking about an amusement park ride or a scary movie, our
questions relate to the natural gas market. The combination of increased investment on the heels of rising natural gas prices
and technological innovation, which created highly economic shale gas development during 2004-2008, also created a natural
gas tsunami―a rising wall of domestic natural gas production that became more apparent in late 2008 (and peaked in early
2009) at a time when demand was severely impacted by collapsing economic demand. Despite the 57% decline in the
domestic natural gas rig count―from 1,585 rigs at the peak in September 2008 to 675 rigs at the trough in July
2009―domestic natural gas production remained high throughout 2009. In fact, domestic natural gas production was too high
given the lack of weather-related demand in 2009 and the slow recovery of U.S. economy-related demand. Combined with
the lack of hurricane-related shut-ins that normally occur, natural gas in storage became bloated, and natural gas prices
traded below $2 per Mcf in early September. It was doom and gloom for the natural gas producers, and the bearish sentiment
seemed pervasive.
Let’s start out by saying that we agree with many of the bearish arguments relative to natural gas. E&P companies,
ameliorated by oilfield service companies, have done an exemplary job of expanding North American natural gas reserves
through the improvement and application of drilling and completion technology. We further agree that increased rig
productivity (defined as incremental production per year, per rig) has increased, resulting in fewer rigs needed to impact
production. However, we do NOT believe the market is awash with natural gas. Although oilfield innovation has aided
improving returns via improving initial production rates (quicker payouts vastly enhance IRRs), the resulting steeper company
declines have potentially created a “treadmill” that is supported only by higher rig counts and higher capital expenditures to
replace production every year. Although domestic natural gas reserves have increased dramatically, ample reserves have
existed to meet long-term domestic demand in places like the Rockies. If shale gas had not evolved economically, a significant
portion of drilling and infrastructure dollars may have been allocated to many of the western U.S. basins to meet rising
demand in 2005-2008. But, capital will flow to the highest economic-return opportunities, and shale gas offers impressive
returns―at least for the handful of high rollers who have the means to get a seat at the Shale Hold ‘Em table.
Domestic production increased rapidly from the inclusion of thousands of high-volume shale gas wells, which brought online a
significant amount of initial production over a relatively short period. However, given the steep declines associated with this
new production, a high level of activity must occur to maintain current production levels. Therefore, the natural gas supply
picture has evolved much like we predicted in the fall of 2008, although the rate of decline has yet to materially kick-in, largely
due to the impact of infrastructure projects that helped additional gas supplies get to market in 2009. Nonetheless, we have
become more bullish on natural gas given the past 90 days, and feel that the next couple of quarters should tell the rest of the
story. Driving our enthusiasm is: 1) our belief that the surge of domestic natural gas production into early 2009 was due to a
combination of new infrastructure and wells coming online that created a shale gas tsunami, and now the tide has turned; 2)
natural gas production finally reacting to the fall-off in drilling activity as excess productive capacity has been reduced; 3)
higher initial production rates, combined with steeper decline curves, make managing production more problematic; 4) shale
gas companies are experiencing steeper base declines of production, and the treadmill is getting faster; 5) the “haves” are
larger, and “market incentives” may be changing; and 6) capex in 2009, preliminary 2010 capital budgets, and the low rig
count suggest that the gas market should tighten significantly in 2010. Remember, a year ago the market was facing rising
production and falling demand, and today the market is facing rising demand and falling production.
It is amazing the difference 90 days makes in a commodity sector. The supply effect of infrastructure maintenance, combined
with voluntary and involuntary shut-ins and rising seasonal economic demand, caused natural gas prices to creep up. Then,
despite the infrastructure-related production oscillations, natural gas production declines became more apparent as a colderthan-
normal January emerged. Natural gas prices have risen and are now basically flat year-over-year. However, a year ago
the market was facing rising production and falling demand, and today the market is facing rising demand and falling
production. Just 90 days ago we were wondering if our 2010 natural gas price forecast of $5.80 per Mcf was too aggressive.
Today we feel like there is upside to this forecast. Although we are maintaining our $5.80 per Mcf gas price forecast for 2010
and our long-term $6.50 natural gas price, we have much more confidence in our projections today than we did 90 days ago.
We are raising our oil price forecast based on anemic estimates for non-OPEC production growth as compared to rising
demand, combined with the effects of a weaker U.S. dollar. Our oil forecast increases from $70.86 per barrel to $78.67 per
barrel in 2010, and our long-term forecast increases from $75 per barrel to $80 per barrel. Additionally, we tied our 4Q09
estimates to actual commodity prices. In conjunction with these commodity price changes, we are upgrading CNX Gas