Michael S. (Mickey) Fulp www.MercenaryGeologist.com
[email protected] Michael S. (Mickey) Fulp, M.Sc., C.P.G.
www.MercenaryGeologist.com
Disclaimer I am not a certified financial analyst, broker, or professional qualified to offer investment advice. Nothing in a technical report, commentary, interview, presentation, this website, and other content constitutes or can be construed as investment advice or an offer or solicitation to buy or sell stock. Information is obtained from research of public documents and content available on the company’s website, regulatory filings, various stock exchange websites, and stock information services, through discussions with company representatives, agents, other professionals and investors, and field visits. While the information is believed to be accurate and reliable, it is not guaranteed or implied to be so. The information may not be complete or correct; it is provided in good faith but without any legal responsibility or obligation to provide future updates. I accept no responsibility, or assume any liability, whatsoever, for any direct, indirect or consequential loss arising from the use of the information. The information contained in a technical report, commentary, interview, presentation, this website, and other content is subject to change without notice, may become outdated, and will not be updated. A technical report, commentary, interview, presentation, this website, and other content reflect my personal opinions and views and nothing more. All content of is subject to international copyright protection and no part or portion of this website, technical report, commentary, interview, presentation, and other content may be altered, reproduced, copied, emailed, faxed, or distributed in any form without the express written consent of Michael S. (Mickey) Fulp, Mercenary Geologist. Copyright © 2012 Mercenary Geologist. All Rights Reserved.
Michael S. (Mickey) Fulp, M.Sc., C.P.G.
www.MercenaryGeologist.com
What’s Up (or Down) with the Natural Gas Market? Vancouver January 2012
Michael S. (Mickey) Fulp, M.Sc., C.P.G.
www.MercenaryGeologist.com
Henry Hub Spot Price Henry Hub Gulf Coast Natural Gas Spot Price ($/MMBTU) 14 12
$/MMBTU
10 8 6 4 2 0
Michael S. (Mickey) Fulp, M.Sc., C.P.G.
www.MercenaryGeologist.com
WTI Crude Spot Price WTI at Cushing (U.S. Dollars Per Barrel) 160 140 120
$/Barrel
100 80 60 40 20 0
Michael S. (Mickey) Fulp, M.Sc., C.P.G.
www.MercenaryGeologist.com
Oil versus Gas : Energy Produced • 1 Barrel of Oil = 5.6 Mcf of Natural Gas • Oil and Gas Reserves = Barrel of Oil Equivalent
• BOE for Financial Statements and Resources: – IRS = 5.8
– USGS = 6.0 Michael S. (Mickey) Fulp, M.Sc., C.P.G.
www.MercenaryGeologist.com
Oil : Gas Price Ratio Oil to Gas Ratio 45 40 35
Oil/Gas
30 25 20 15 10
5 0
Michael S. (Mickey) Fulp, M.Sc., C.P.G.
www.MercenaryGeologist.com
Why is Natural Gas Depressed? • Shale Gas Technologies • Low Risk / High Reward • Transportation Infrastructure
• Storage Capacity Michael S. (Mickey) Fulp, M.Sc., C.P.G.
www.MercenaryGeologist.com
Why is Natural Gas Depressed? • Processing Capacity • Power Plant Capacity • Environmental Opposition
• Land Access Michael S. (Mickey) Fulp, M.Sc., C.P.G.
www.MercenaryGeologist.com
January 2011 – 2012 Price & Rig Counts • Oil Price: Up 10 % • Oil Rigs: Up 54 % • Gas Price: Down 45 % • Gas Rigs: Down 14 % Michael S. (Mickey) Fulp, M.Sc., C.P.G.
www.MercenaryGeologist.com
Oil vs Gas Rig Counts US Oil Rig Count
US Gas Rig Count
1400
1800 1600
1200
1400
800 600 400
1200 Rig Count
Rig Count
1000
1000 800 600 400
200 0
Michael S. (Mickey) Fulp, M.Sc., C.P.G.
200 0
www.MercenaryGeologist.com
Oil : Gas Price & Rig Ratios Oil/Gas Price & Rig Ratio 40.00 35.00
2.00 Price Ratio Rig Ratio
Price Ratio
30.00 25.00
1.80 1.60 1.40 1.20 1.00
20.00 15.00
0.80 0.60
10.00
0.40
5.00
0.20
0.00
0.00
Michael S. (Mickey) Fulp, M.Sc., C.P.G.
Rig Ratio
45.00
www.MercenaryGeologist.com
United States Energy Budget 2008
2010 Hydroelectric, Biofuels, 2% Other 2% Renewables, Wood, 2% Nuclear, 9% 2% Petroleum, 37% Coal, 21%
Natural Gas, 25%
Michael S. (Mickey) Fulp, M.Sc., C.P.G.
www.MercenaryGeologist.com
Natural Gas Demand 1990 - 2035
Michael S. (Mickey) Fulp, M.Sc., C.P.G.
www.MercenaryGeologist.com
USA Shale Gas Plays
Michael S. (Mickey) Fulp, M.Sc., C.P.G.
www.MercenaryGeologist.com
Domestic Natural Gas Demand • Residential & Commercial Heating: 22 % • Industrial: 38 %
• Electrical Generation: 37 % • Transportation: 3 % Michael S. (Mickey) Fulp, M.Sc., C.P.G.
www.MercenaryGeologist.com
United States Natural Gas Resources • World’s Largest Gas Producer • World’s 6th Largest Reserves
• 110 Yrs of Resources at Projected Demand • Self – Sufficient in Natural Gas Michael S. (Mickey) Fulp, M.Sc., C.P.G.
www.MercenaryGeologist.com
Domestic Energy Imports • 30 % of Daily Energy Budget • 9.4 Million Barrels Oil Per Day • At $ 100 / bbl = $940 Million Per Day
• $343 Billion Per Year Michael S. (Mickey) Fulp, M.Sc., C.P.G.
www.MercenaryGeologist.com
USA Energy Independence • Uranium • Natural Gas
• Coal • Renewable / Green Michael S. (Mickey) Fulp, M.Sc., C.P.G.
www.MercenaryGeologist.com
Monday Morning Musings from Mickey the Mercenary Geologist
Michael S. (Mickey) Fulp, M.Sc., C.P.G.
www.MercenaryGeologist.com
www.MercenaryGeologist.com Copyright 2012
[email protected]
Michael S. (Mickey) Fulp, M.Sc., C.P.G.
www.MercenaryGeologist.com