天然气价格上升，谁Benefit？# Stock
a*1
1 楼
Natural gas price is more than doubled from last year. NG companies will
certainly benefit from it during the rise. However, the benefit was limited,
because most of the companies usually hedged before the year end 2012. For
example, CHK hedged 50% of NG at 3.62 by mid Q1, 2013. With price keeps
going up, they can certainly hedge more for 2014. But they won't produce
more until price hit 6, where the break even cost is.
So from the cash flow point of view, Natural gas companies won't benefit as
much as gas itself.
However, what they will benefit is the asset value. The natural gas reserve
is calculated based upon the trailing 12 month average price of natural gas
and thus calculating the land value and reserve value. For most of the
producing area, the break even price is between $4-$7, and the last year
average price of NG was below $4, the NG companies had already wrote down
significant of their asset value, thus big loss for 2012.
Since most of them are short of cash funding for 2013, fire sale is going on
these days and supply is overwhelming. With price steadily going upon, we
will see those companies' book value going up. In the meantime, asset
selling price should improve too.
certainly benefit from it during the rise. However, the benefit was limited,
because most of the companies usually hedged before the year end 2012. For
example, CHK hedged 50% of NG at 3.62 by mid Q1, 2013. With price keeps
going up, they can certainly hedge more for 2014. But they won't produce
more until price hit 6, where the break even cost is.
So from the cash flow point of view, Natural gas companies won't benefit as
much as gas itself.
However, what they will benefit is the asset value. The natural gas reserve
is calculated based upon the trailing 12 month average price of natural gas
and thus calculating the land value and reserve value. For most of the
producing area, the break even price is between $4-$7, and the last year
average price of NG was below $4, the NG companies had already wrote down
significant of their asset value, thus big loss for 2012.
Since most of them are short of cash funding for 2013, fire sale is going on
these days and supply is overwhelming. With price steadily going upon, we
will see those companies' book value going up. In the meantime, asset
selling price should improve too.