Thursday, May 15, 2008

Nornew, part III, or is it IV?

My estimate of the value of NG per acre that I made in the previous Nornew thread may be low. If a verical well has 1 BCF recoverable on 40-acrespacing, at $10/mcf, that's about $250,000/acre. A horizontal well would be even higher. Of course, it all depends on the price of NG. It may go higher. For awhile, anyway. Wait 'til all these wells are up and running. Maybe someone can enlighten me as to whether the commodity price for NG is at the point-of-use or the wellhead, or what.

Contrast the energy produced by one NG well, sited unobtrusively, distributed by an underground pipeline, with that produced by these monster windmills and vast solar power installations. I'll take a NG well in my backyard over a windmill anyday. Windmills are noisy and huge. They blight the landscape. To get any quantity of energy from solar you best be prepared to cover vast stretches of the earth.

God I love fossil fuels. They keep me warm and move me around. They burn cleaner than ever before, and cleaner still all the time. Their increased use has coincided with cleaner and cleaner air and water.

And I'm sick of listening to people say, "We need an energy policy." How about NO policy? Just shut up and get out of the way! Take your CAFE standards and your subsidies and tax incentives and go someplace else and let the people who provide us with energy provide us with energy. No politician has ever done a thing to provide anyone with energy. Energy comes from
companies like EXXON and this vast array of companies in the marcellus "play". Companies with the guts to take risks, invest time and money, and produce something that has value to people. Politicians have NO value. They produce nothing except obstacles and roadblocks.

Kinda early for a rant.

36 comments:

Anonymous said...

New

Anonymous said...

Greeting Murphies! - warning wall of text :)

Im also i Nec shareholder. Prowling the web I just stumbled into your blog, and I find this exiting!
Usually when i find new info, its in the form of an analysis, a news report or a forumthread.
^Hence the exitement of finding the honest word of someone that lives in "the middle of the happenings".

Before i vent my opinions, I suspect a "disclaimer" would be at its place.

Im a norwegian. Thus my political/economical/enviromental may differ somewhat from yours. (And seemingly somewhat from the other norwegians here as well.)
Im not an expert in economics/stocks.
I own Nec shares. Not many in the "big picture". However, Nec is about 1/3 of my total portfolio, and thus a big part of my economy.
Any statement from me is my opinion, nothing else.

That being said, I, as many others believe that Nec is undervalued at this point. As are gas prices.
I also expect to keep my Nec shares at least to the end of 08. This may change. I have already an +55% gain on my shares, and dare not expect to much more.
Now. To the points where i expect someone to disagree. This is not meant as trolling, or to "scare" you. More as a friendly warning.
1. If your not familiar with how the Norwegian stockmarked reacts to global/american stockmarkeds I urge you to read about it.
A key issue is that if one or more american exchanges drops in points, the norwegian one usually follows, and to often drops further.
Like this jan/feb.. OSEBX fell almost 25% mostly due to the american sub-prime happenings.
2. It's worth noting that Nec was one of the companies that was least effected by this. But i fear that after the last months gain in value this may not be the case if OSEBX plunges again.
3. Both american, norwegian (and the rest of the worlds i guess) markeds are highly volatile. Should any "sub prime happening" occur again, I fear we will see deeper depths this time.
4. As Nec has seen a tremendous "re-pricing" the last few weeks, I would presume a correction is coming soon. This could go both ways.
5. In the same period of time as Nec, another company Qec, has risen around 1500% in value and are now seeing corrections. Qec are in many ways similar to Nec, both being gas companies and such.
Keeping a close eye on Qec the next few weeks may help indicate Nec's further growth/fall.
6. I would NEVER indebt myself to buy stocks. Nor would i spend more than i can afford to loose.

Anyways. I see some reference to HO forums in older posts. While HO is the largest of norwegian stock forums, it's also the poorest one of quality. HO has the last 2 years "won" the price for being the worst forum overall in Norway. This due to constant racial slurs, spamming/flooding, and outright lies about companies. Most of the threads only contain gibberish and nonsense.
I use another forum called stocktalk.no, they require you to have a username unlike HO.
They also have active moderators, unlike HO.
They do however charge a few $ monthly, though the first month is free.
My guess is that you would be more than welcome to join the Nec thread there! ;)

I'll stop ranting now...

good luck murphies!

Harpoon

Dad said...

Hi, Harpoon! Thanks for stopping by. And thanks for your insights. I expect a few shares of NEC won't make me rich, but it adds a layer of interest to invest in a company that a) you already have a business relationship with, and b) you can watch at work on a daily basis.

As you may have gathered, I expect the energy market to collapse at some point, given a far enough horizon. (It always has in the past. Energy, like food, gets cheaper and cheaper over time.) Judging from the past, the horizon could still be 7 or 8 years away. It could also be much closer if demand destruction is severe. My eyes are wide open. I appreciate your advice.

I'm off to my daughter's graduation from college this weekend, but I hope to come up with more pics of Norse's activities in the area next week. I know BS is anxious for same.

Come back often! And please fell free to post any info you deem relevant.

Anonymous said...

This is the year of natural gas!

Dad said...

Yeah, Cramer came to the blog yesterday (he comes by most days) and read this post. He emailed me later saying to watch his show and that he was inspired by this post. What a guy!

Yup, yup, yup.

Luke Murphy said...

Heh, Cramer shouldn't have gotten on his knees to the democrats like that. No one should ever do such a thing.

Wait Dad, really???

Anonymous said...

US freezes Alaska drilling

US ‘might contest Brazil’s oil trove’


Politicians.............

Anonymous said...

Infuriating.

Anonymous said...

They are just INSANE. it's NONSENSICAL.

Luke Murphy said...

The Law of the Sea sucks and we should ignore it. The oil fields don't belong to any state, they belong to whoever finds and develops them(NEC?).

http://www.cato.org/pub_display.php?pub_id=2567

http://www.aynrand.org/site/News2?page=NewsArticle&id=16115

Luke Murphy said...

Here are those links again:

Cato

ARI

Hi Jim Cramer! Love your show!

Anonymous said...

Hi LUKE! love your BLOG. it's AMAZING and full of GREAT inforMATION.

Anonymous said...

Bush Says Saudi Oil Boost `Not Enough' to Ease Prices

Bush voiced frustration with congressional blockades of Republican-led efforts to increase domestic drilling.

``One of the interesting things about American politics is, is those who are screaming the loudest for increased production from Saudi Arabia are the very same people who are fighting the fiercest against domestic exploration, against development of nuclear power and against expanding refining capacity,'' Bush said.

``So I was pleased that they increased production by 300,000, but I am also realistic to say to the American people that we've got to do more at home and we need a Congress who will be responsive to those requests,'' Bush said.

Anonymous said...

Yeah. We're sitting on lots of oil and we expect OPEC to increase production to help us out. Why don't we help ourselves?

Anonymous said...

The problem is smug, and high concentrations of smug is the leading cause of Global laming.

Caleb said...

The smug, of course, coming from all those Toyonda Pious drivers, right?

Caleb said...

Wow, Jim Cramer, right here on our blog. And he writes like he talks!

Luke Murphy said...

BOOYAH!!!

Anonymous said...

COWABUNGA!



Oh, wait. That's someone else, isn't it?

Anonymous said...

AWESOME will be my handle, just don't feel like seeting up an account

I live in Norwich. Talked to family of the Blood Well that was just completed. Nornew told family that well was exceptional. Would produce at $2.0K per day once online. That is on a 12.5 % royalty. Also, Nornew has bought many leases for under $100.00 per Acre locally before the Marcellus rush began two months ago. They have now started offering 200 per Acre. Also, Nornew is buying any farm land asking lesst than 2.0K per Acre. I think they are on to something here. Would not be suprised to see them sell operations for 100 to 300% profit as the going rate for marcellus land is over 2.0K per Acre

Anonymous said...

Hi, Awesome. Welcome.

Ah, is that 2K/day the royalty or the gross production?

Anonymous said...

Pickens: Oil Going to $150, So Move to Gas

Anonymous said...

We have Boobe to thank for the runup of the last couple days. I saw him a couple months ago saying he was shorting oil. He didn't just learn the oil market in the last two months. He's trying to make himself some money and promote his wind projects.

Anonymous said...

Boone, I mean. "B" and "N" are next to each other on the keyboard.

Anonymous said...

U.S. crude supply down 5.4 mln brls last week

Maybe Boone is a fast learner?

Anonymous said...

The fundamental laws of supply and demand are at work

Anonymous said...

BS, you rock.

Boone is crafty. He played the market for fools.

There's something going on besides simply S & D. Had any problems getting gas? Heating oil?

I love the weekly EIA report. If I miss it, it's on the DVR. But, really, weekly? Weekly is too small an interval to have any meaning.

Anonymous said...

Natural Gas Nabobs May Come Around

Anonymous said...

Farm family embraces gas 'miracle'

Anonymous said...

Oil Falls More Than $3 as Record Prices Curb U.S. Fuel Demand

Anonymous said...

Let's see what happens when the Olympics are over.

Anonymous said...

Less talk, more action in Brazil?

And Norse is partner with Petrobras offshore Brazil.

Anonymous said...

Hello, can anyone tell me if there is a map showing the Nornew pipeline route from Smyrna NY to County Route 16 running through Plymouth NY?

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