I had a great interview with Brian Sylvester at www.theenergyreport.com just published to their site. We covered everything from wet gas to heavy oil. I talked about a dozen junior oil and gas stocks that investors could consider researching (or of course they could subscribe and have it all handed to them on a blackgold platter).
It was a fun and lively discussion and they did an excellent job collating a wide ranging interview into coherent sound bytes. The Energy Report has weekly interviews with top fund managers in oil and gas and others. It’s great to see a site dedicated to helping the junior energy producers get exposure. Subscribe to their weekly e-letter – it’s free and informative. I’ve included the first couple questions and a link to the rest of the article:
The Energy Report: Keith, when The Energy Report talked with you in December, you said that a gas price below $5 would be “hell.” Well, welcome to hell. Gas is hovering around $4.50 right now. Where’s the bottom?
Keith Schaefer: It has been a very tough year for gas producers. Since January, the gas price has been on a straight downhill slide, with very few bumps up along the way. It has been hell, particularly for the juniors that are unhedged. These companies are creating no value for their shareholders. Their cash flow is anemic.
Where is the bottom? I think there’s a good chance we’re going to find that out in the next month or so, because gas traditionally bottoms in August. Last year, it bottomed around $2.50, $2.75 per MCF. Then in September, it started to take a big jump back up to $5. These stocks had a huge run along with that. It’s almost funny, because none of these companies were really making money at $5, but the fact that they were losing a little bit less made the market very happy, and that took the stocks for a big run.
TER: At the same time, a lot of producers are hedged. Most of them are right around the $6 mark.
KS: Many of the seniors are hedged at $6. The forward curve has allowed them to do that. Good for them and their shareholders, because it looks like we could be in for a multi-year low gas price if these U.S. shale plays hold up.
TER: What’s your view on the gas price through the end of this year and the end of 2011?
Click here to find out which junior energy stocks got special mention!
Related posts:
- Keith’s Interview with Michael Campbell of MoneyTalks Radio
- 2012 Outlook for Natural Gas: The Norm Lamarche Interview
- Tamarack Valley Energy Issues Operational Report That Exceeds Expectations
- My Favourite Junior Oil Stocks Exposed – the David Pescod Interview
- Oil: The New Financial Product – Interview with Oil’s Endless Bid author Dan Dicker
