Might be Time for NG Producers to Find New Career

[Zhong Lu + 845]

Perhaps gold prospecting.  I mean, they both involve digging underground.  Can't be all that different, right? 

[Tom Kirkman + 8,860]

3 minutes ago, Zhong Lu said:

Perhaps gold prospecting.  I mean, they both involve digging underground.  Can't be all that different, right? 

Gold doesn't burn or blow up, so maybe a bit less fun to play with.

[Zhong Lu + 845]

Pray for me.  I've decided to go long on NG.  

[George8944 + 128]

The market and need for natural gas is not going way.  Now that the venture capitalists are pulling back and reality is settling in, what will remain are well run ( well, better run with respect to 2019) companies in the NG arena.  Personally,  I think the ones that are trimming back CAPex spending for 2020 and paying down debt will be the survivors.    

There are many ways to play this market, the drillers are probably the riskiest.   You also have the transporters (think pipeline companies), those creating LNG, those maritime companies contracted to deliver LNG and those building and/or leasing those ships.

It's being challenged on safety grounds, but railroads are now able to transport LNG.   If this law does not get over turned you will see profits at Union Pacific, CSX, Canadian Rail and the other old time coal haulers go back up.   ( I own stock in Union Pacific.) 

One last thing about me.  While I do play stock options on weekly basis for entertainment,  I can sit on stocks for several years while my thesis unfolds.  If you get involved in the natural gas equities, plan on playing the long game.  This will be a roller coaster.

 

 

[Rasmus Jorgensen + 1,169]

6 hours ago, George8944 said:

There are many ways to play this market, the drillers are probably the riskiest.   You also have the transporters (think pipeline companies), those creating LNG, those maritime companies contracted to deliver LNG and those building and/or leasing those ships.

Personally, I think the biggest payoffs will be in pure play NG companies such as companies focused on developing tech for NG conversion into various things, NG engines etc. 

All the maritime & infrastructure companies will be bogged down by their portfolios I think. 

[Zhong Lu + 845]

Not even prayers will work for NG.  Sold UGAZ @9:30 in the morning (sell first, cry later).  Glad I did.  

There will be a huge rally in prices within 6 months, but that time is not now.  Frankly, as long as I can tread water and not LOSE money (or only lose small amounts betting on rallies), the lower the NG prices, the bigger the rally, and the more the profits.  Eventually.  Just need more patience and discipline.

By the way, the long-term charts are showing potential for 1.5 for NG.  

Edited January 21, 2020 by Zhong Lu

[Zhong Lu + 845]

Jumped back in. This can't tank forever.  U, a little under 50.

[Rob Kramer + 696]

Is long oil not better right now?

[TomTom + 183]

23 hours ago, Zhong Lu said:

Not even prayers will work for NG.  Sold UGAZ @9:30 in the morning (sell first, cry later).  Glad I did.  

There will be a huge rally in prices within 6 months, but that time is not now.  Frankly, as long as I can tread water and not LOSE money (or only lose small amounts betting on rallies), the lower the NG prices, the bigger the rally, and the more the profits.  Eventually.  Just need more patience and discipline.

By the way, the long-term charts are showing potential for 1.5 for NG.  

the squeeze will come, but you gotta have a serious appetite for risk betting UGAZ in the meantime..

[George8944 + 128]

I'm still learning how this forum works.

I'm looking for slow and steady.   The infrastructure companies make money by transporting.  They are somewhat independent of the price fluctuations of what they transport.  Many have long term contracts which allows them to project expenses and revenue far into the future.

I'm always open to looking at other parts of this industry.   Call out companies by name!

[Ward Smith + 6,615]

On a BTU basis, natural gas is horrendously under priced. If oil is $60 for 6 million BTU's then gas should be $10. Give it a discount for transport, maybe 8? But pipelines can't handle gassy oil, so out it comes, no matter what, price be damned. I feel sorry for the pure play gas drillers. I can't figure out what is keeping Chesapeake going. 

[George8944 + 128]

On 1/21/2020 at 2:26 PM, Zhong Lu said:

Just need more patience and discipline.

I totally agree!   After tax considerations,  jumping in and out is a very difficult way to make money.  I've been more successful picking trends, verses trying to find the best stock.   As the expression goes, a rising tide lifts all ships.    If you can spot the trend before the rest of market agrees with you, almost any company swept up in that industry will rise to some degree.  I know many will disagree with me, but having put two kids through college without loans, and paid cash for my last three cars (my average hold time is 10 years!), I'm fairly set in my ways.

[Boat + 1,324]

Drilling wells and completions are down around 100 over the last few months and still trending lower in the Permian. Going long seems reasonable to me.

[George8944 + 128]

3 minutes ago, Ward Smith said:

I can't figure out what is keeping Chesapeake going.

I agree. I actually bought call options on this stock that expire in a year.  It's my highest risk holding, but the dollar value is so small as percentage of my portfolio that I thought it was worth the cost of admission.  We will know in an other quarter or two if they can get ahead of their debt payments.   

Look at Montage Resources (MR).  They seem to manage both oily and dry gas production.  I don't own their shares.

[Zhong Lu + 845]

I might buy CHK after it drops from the reverse split.  Heard that these things almost always goes down after RS.  

Oh yeah, I got out of oil @ 58 on Friday. Only problem was that I used it to buy NG @ 1.98 on same day.  Just staying honest.  

[Zhong Lu + 845]

Sold half before report, sold half after report. Been treading water for last 2 months, mostly because been trying to go long natural gas and breaking even.  At least I can brag: "I was a natural gas bull in the winter of 2019-2020 and I didn't lose money." May need to revisit what I'm trading, along with general strategy.  Out of everything for now.  If oil goes back to 52, may as well take a shot.  If natty drops down to 1.6, or breaks above MA definitely taking a shot, too.

Edited January 23, 2020 by Zhong Lu

[Zhong Lu + 845]

I'm not even sure I want to buy natty @ 1.6. I might just for a bounce, but with the way things are going this might even worse then 2016.  

[Rob Kramer + 696]

On 1/23/2020 at 10:44 AM, Zhong Lu said:

  At least I can brag: "I was a natural gas bull in the winter of 2019-2020 and I didn't lose money."

Lol that's like me with cdn oil and gas stocks! But looking over the convo boy was I wrong on that oil trading thought! Glad I'm in a 28$ brent break even stock on weeks like this. 

[Zhong Lu + 845]

DEATH.