NATURAL GAS
As one of the few commodities to have yet have a
good run as the world economies seems to be appear-
ing, natural gas continues to be the center of debate.
Some are expecting a short-term rally, others are
thinking this could be the winter that Santa Claus visits
the natural gas patch and many others figure that this
winter will be a write-off—that there is too much gas in
inventory and it will be next winter before natural gas
prices and gas stocks take flight from ultra-depressed
levels.
We caught up with Doug Bartole last Friday as he is
on one of those IR trips, trying to get the Vero Energy
story out there and we have to mention that Vero is one
of those companies much admired for their management
skills, but that doesn’t mean they don’t have debt and
concerns about gas prices either.
We own a bunch, hoping that sooner or later gas
does recover and Bartole e-mails us these comments
about natural gas:
“I always thought we would see a rally in the stocks
not the gas price in the fall as the market should look
forward. Natural Gas is one of the only commodities that
haven't ran. As we have known for months we would
end injection season at the highest storage levels ever.
We are now getting close to that time. Still going to have
some volatility and short term pain but still optimisti-
cally bullish that it will turn in 2010.
If that is confusing
then welcome to natural gas lately. Supply is continuing
to drop and rig counts are still low and not increasing on
any relevant basis.
Next is winter, even if normal I think we get back in
the $6 for 2010. It goes higher if colder and lower if
warmer. The good thing is we are optimistic because
the incentives out there from the government are phe-
nomenal and Vero will show good growth even at $5. So
that is why we are in plan mode for a potential aggres-
sive program and have more jump in our step than we
have in a while.”
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