PLAINS BUYS UP ASSETS
Its a 40 million dollar deal but Plains All American (PAA) is buying up assets from Holly Corp (HOC). Nice to see deals popping up lately as it shows the enviornment continues to improve. This came out after the close yesterday. Also Teekay Offshore (TOO) announces its quarterly payout. That's it so far this morning. Kinder Morgan (KMP) starts the earnings parade in the group this afternoon as it posts numbers usually seconds after the close of trading so we will watch for those. No other headlines so far this morning. Nothing on the upgrade downgrade list.
Overall markets look a touch softer this morning but futures are off the lows. Energy is down this morning ahead of oil inventory numbers where the gasoline draw down will gain quite a bit of attention and could be the driver to take crude prices above 80. Or if it shows last week's drawdown was one of those weekly distortions it could be a driver of a big selloff. Numbers at 10:30am. Nat gas is down 3 cents as we have 5.00+ futures which have to be much better for nat gas and coal mlps with commodity exposure.
One last check of headlines and its all quiet. Headlines as they break this morning.
joseph cioffi's Source Page - Associated Content
1 comment:
Joe,
What are your thoughts?
Max
Shale gas glut to disappear?
Running down the depletion numbers on shale gas, analyst Arthur Berman found that in the first year of production decline rates have been in excess of 50% for Barnett wells, and 90-95% for Haynesville Shale wells. The average well in the Fayetteville Shale is "profoundly non-commercial" he said, and predicted that most shale gas wells will be abandoned in less than five years after their first production because the output will be so low.
There is also a fear, which I have articulated previously, that with an average production cost of $7-8/Mcf for shale gas and prices through most of 2009 staying around $4 or less, new wells simply haven't been getting drilled. The effects of that lapse should show up next year and cause our "glut" to disappear quickly, taking prices much higher.
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