T.G.I.Free Post Friday



Housekeeping Watch:  I will be out of pocket much of Friday on family business. If you have any questions please leave them in the comments section and I will address them as time permits. 

In today's post please find:

  • the natural gas storage slide show,
  • the natural gas supply / demand update, 
  • selected interesting supply and demand charts,
  • the Gassy Players Update,
  • 4Q23 Energy Earnings Calendar,
  • and some other odds and ends.

Ecodata Watch:

  • We get personal income at 8:30 am EST (F = 0.3%, last read was 0.4%), 
  • We get personal spending at 8:30 am EST (F = 0.5%, last read was 0.2%),
  • We get PCE at 8:30 am EST
    • Headline: no forecast, last read was -0.1% month to month and +2.6% YoY
    • Core: forecast is 0.2% vs 0.1% month to month and 3.0% vs a prior read of 3.2% YoY
  • We get pending home sales at 10 am EST (F = 2.0%, last read was 0.0%).

In Today’s Post:

  1. Holdings Watch
  2. Commodity Watc​h - ST natural gas supply demand balance sheet, NGL prices,
  3. Natural Gas Inventory Review
  4. Stuff We Care About Today - Gassy Players Update, 4Q23 Energy Earnings Calendar
  5. Odds & Ends


Holdings Watch:


Commodity Watch:

Crude oil settled up $2.27 yesterday at $77.36 with Thursday's set of better than expected U.S. economic data driving thoughts of higher oil demand. Red Sea and Russian news items were also price supportive. This morning crude is trading down 1%.

NGL Price Watch: Walking about with oil and propane; expect uptick near term. 


Natural gas closed off $0.07 at $2.57 on top 3 type withdrawal that was in line with our number and Street, with near month futures eying next week's smaller (but still surplus eroding) expected pull from storage.  BNEF reported L48 production, still recovering from the prior week's freeze offs, relapsed to 99.6 Bcfgpd on Thursday but this is noise and we should be back to the 103's near term. 

  • EIA reported a 326 Bcf withdrawal, in line with our 325 Bcf estimate. 
  • Next week we are looking for a smaller but still significant withdrawal of 225 Bcf and demand wanes with milder temps and production partially recovers.


  • EOS Watch: Our spring end of season storage trough has been downwardly biased for the last few weeks and is showing just under 1.8 Tcf at the moment (see graph A3 in the the slide show below).
  • This morning gas is trading up slightly early.

Short Term Supply / Demand Balance Sheet:

Selected Electricity and Interesting Week Supply and Demand Charts:

Generation Share:  Note gas up big and coal down big in a slightly down market in 2023. We expect natural gas to again push record power burn in 2024 and would note it is increasingly becoming key in the heating season, not just for summer cooling. See Power Burn below.

Power Burn: Off season demand continues to push record levels. 





Natural Gas Storage Review 



Stuff We Care About Today

Gassy Players Update - this post is archived under Gassy. We've inserted a few notes on CHK+SWN into the table as well.


4Q23 Energy Earnings Calendar

  • Please see the calendar link at upper left for an updated list.

Odds & Ends

Analyst Watch:

  • TBA in comments

62 Responses to “T.G.I.Free Post Friday”

  1. 1
    zman Says:





  2. 2
    zman Says:

    Fed Funds CME tool

    Jan 31 meeting – 97% no change

    March 20 meeting – 50.7% no change, 48.1% quarter point cut.

  3. 3
    zman Says:

    At equity open

    WTI down 50 cents

    NG down 4 pennies

  4. 4
    zman Says:

    Analyst Watch – LBRT

    ATB Cap trims target a buck to $25.

    Piper ups a buck to $28.

  5. 5
    zman Says:

    Analyst Watch

    RRC – Susquehanna downgrades to Neutral.

    Cuts target from $43 to $34 as they lower their oil and gas price decks today.

    That $34 is close to our own upside target.

  6. 6
    Kyle Graffagnini Says:

    I know EOG is not a name for you but any thoughts there?

  7. 7
    zman Says:

    Analyst Watch

    SWN – Susquehanna also cutting rating to Neutral here, going from $9.00 to $6.50 on the target.

    This seems overmuch and late and really should be reflective of thoughts on the CHK pro forma, with this target imply $70’s for CHK.

    Seems like a bit of a bid to generate commission especially as the firm, while cutting their price deck, is raising CTRA from Neutral to Positive while trimming their target there by $1 to $30.

  8. 8
    zman Says:

    re 6 – we can put on a list for an update but not currently active in the story.

  9. 9
    Jeff Judy Says:

    Assuming they halt any new LNG approvals until the election (and likely uncertainty about LNG approvals thereafter until results are know), how do you think it will impact NG pricing for the rest of the year?

    Do you think it might further delay a meaningful uptick in NG pricing?

  10. 10
    Jeff Judy Says:

    I realize the under-construction LNG facilities don’t have an issue so export growth still occurs in 24-26/27 for those, but would imagine it still has somewhat of a chilling effect on sentiment?

    Not to mention it gives more time for Qatar and other countries to approve & sign contracts for additional LNG facilities that would potentially decrease the need for new LNG facilities that are currently on hold?

  11. 11
    zman Says:

    re 9 – thoughts

    1) no fundamental impact as to LNG exports from that in your time frame.

    2) would not expect that to impact rig and frac spread activity in 2024.

    3) if you look at the reaction when it was first whisper announced we saw some weakness in the 2028 plus strip.

    4) so really we’re talking about capacity that might have come on late 2026 but more probably would have been more impactful to 2027 volumes (speaking to CP2 specifically)

    5) we’ve already seen a couple of delays for this year (from November/December) that are impacting the timing of ramp in production to meet ramp in LNG export capacity growth. These were not tied to the government but to the projects themselves.

    6) #5 is probably a push or a modest positive for pricing in that you have upstream names less willing to complete more wells for growth into 2H24 beyond maintenance levels.

    7) Still, max export now is around 15.1 Bcfgpd and we should be 20 to 21 by 2H25.

    8) So 2024 is maintenance to maintenance plus for the big players depending on where they are located with a bit later upward bend in activity to ramp for 2025.

    9) anything that’s Venture Global related on a chart I’d push a few quarters out on to reach full capacity.

    See slide 25 here:

    and slide 24 here:


    Both of these are stale and will push to the right on the 2024 numbers when they update them with their 4Q calls.

  12. 12
    zman Says:

    Regarding our add back to the portfolio this week of LBRT at $17.53 pre earnings.

    1) expected cautious but positive color
    2) didn’t expect the dip on the miss to be so short lived.
    3) no reason to chase more at the and as such we remain pretty small here.
    4) will get through more service names soon and would like to see it settle back a bit before rebuilding this one bigger.

  13. 13
    zman Says:

    We posted a number of additional demand and supply wedges on twitter this morning.

  14. 14
    Kyle Graffagnini Says:

    Any concern with NFE with all these headlines?

  15. 15
    Jeff Judy Says:

    thx for the detailed thoughts

  16. 16
    zman Says:

    Reuters consensus for next week -180 Bcf

  17. 17
    zman Says:

    re 14 – thoughts

    1) not really, again no impact near or medium term to US outlay.

    2) they’re on the regas side a lot more than they are on the liquefaction side.

    3) could it be a problem for Altamira floating off Mexico? I really don’t think so, it’s got all it’s permits and it’s Mexico so … I think that would be a stretch to try to interfere with their feed. This should be freezing gas now.

    3a) NFE had another liquefaction project moving forward in international waters in the GOM … not sure where the company is on this one at the moment. It was well into permitting despite some noise in the headlines there and at Altamira the last six months. If anyone knows different on these two let me know.

    4) projects in Qatar and Australia are doing fine. T&T will also add capacity back to support some recent wane there in that longer time frame too so there should be plenty of LNG to get regassed by their terminals.

    5) from a sentiment standpoint however it’s a bummer. It doesn’t inspire confidence in LNG from the US in general and from what I read it’s making the EU unhappy.

  18. 18
    zman Says:

    re 15 – you bet, always feel free to redirect.

  19. 19
    zman Says:

    Getting on the CNX (unowned) replay and transcript from yesterday. 20 minutes long, just Q&A as is their habit. Back in a bit. Couldn’t listen yesterday due to schedule conflict.

  20. 20
    zman Says:

    mmin – I’ve not forgotten your question and will circle back to you today.

  21. 21
    zman Says:

    LBRT > $20, nice.

    Would suggest PTEN will see similar path with earnings color.

    ACDC won’t be able to speak to that kind of balance sheet unless they can spin the sand side as they are trying to do.

  22. 22
    zman Says:

    CNX (unowned) in pure maintenance mode production holding pretty flat around 580 B’s (1.6 Bcfepd) in 2024 (up 3.5% from 2023) and then flat 580 Bcf in 2025. Will see a modest dip in 1Q on activity and edge back up rest of year to hit the 580.

    On mid they’re an implied $1.85/Mcfe, helped by hedges.

    This is the first of the bigger gassy names to report and they don’t plan to grow much this year and not at all next.

    Capex falls a stout 17% in 2025 to achieve that plateau. Not sure their view on service pricing to meet that.

    FCF to continue to be channeled to the buyback – sounds like this year and longer if they continue to see themselves as discounted.

  23. 23
    zman Says:

    re 22 – pretty amazing they can hold production flat with one rig and one spread. In 2025 they see utilization of both lower and capex trending below $500 mm to keep that 1.6 Bcfepd level.

  24. 24
    nrgyman Says:

    Re 23: Falling decline rate meets improved completion tech and stable service prices?

  25. 25
    zman Says:

    Freeport LNG with a cold related hiccup in gas intake prompting a little selling in NG at the moment. Freeport makes gas traders nervous. Could be noise but they’re pretty shoot first especially this time of year.

  26. 26
    zman Says:

    re 24 – exactly. Historically speaking, that’s a massive amount of gas to keep up with one rig. It will have dips and bumps due to timing of TILs but that’s impressive. The longer they do it the more everyone believes and then later in the decade will be really interesting to see as rock quality for some names comes off. That should be a time when names like RRC really benefit from others inventory issues. Now I see them as decently valued for their stats.

    On that rate vs rig count, note that AR is 3.4 Bcfepd-ish and runs a 3 rig/2 spread program.

  27. 27
    zman Says:

    Light volume profit taking in oily names underway as oil dips.

  28. 28
    zman Says:

    Headline Watch

    Impact of US pause on new LNG project approval could take years to manifest. ~ TD Cowen.

  29. 29
    nrgyman Says:

    RE 26: AR with double the production and double the frac spreads vs CNX so they are comparable. AR has an extra rig, though, but that might be related to DUC inventory management. It is amazing how these producers can maintain production with so little D&C vs historical levels. Long periods of flat production growth will reduce decline rates so that is a factor, but the improved D&C tech productivity is really notable.

  30. 30
    nrgyman Says:

    RE 28: Yes and the election is only months away, which means this pause could easily be reversed regardless who wins.

  31. 31
    zman Says:

    re 25

    Headline Watch:

    “Texas Freeport LNG unit faces month-long outage due to winter storm”

    It’s one of their three trains so about 0.7 Bcfgpd.

    Note also that one train has been down monthly since they came back up.

    So we hit 15+ Bcfgpd recently and Freeport was having troubles then.

  32. 32
    zman Says:

    re 29 – helps revisiting pads too.

  33. 33
    zman Says:

    re 30 – yeah. Could be longer too. If they are really trying to go Scope 3 on climate impact measurement that would be an imperfect task. I can simplify for them by asking what the offset fuel is given the response has to be coal.

  34. 34
    zman Says:


  35. 35
    Zorgnak Says:

    Good Morning
    ZLT-related ranked by relative volume for the time of day. Very light.

  36. 36
    jeff j Says:

    A proppant/sand related question. With a simulfrac well do they use approximately double the sand? With a trimulfrac would they use triple the sand?

    In general wondering if the more cost effective/efficient fracking approaches more E&Ps are using still end up using the same/more sand, it just allows them to frack wells faster?

  37. 37
    jeff j Says:

    Also as E&Ps get to lower tier acreage, do they need to use more sand per well or is it just that each well produces less oil/gas?

  38. 38
    zman Says:

    re 35 – morning Zorg, hear ya very light buying and selling in the space.

  39. 39
    zman Says:

    re 36 – thanks, thoughts

    It’s really just faster, so more wells at the same time, not half the equipment but more than a single spread. On the sand it should the same as one well after another well type operations. Mostly it’s just time savings. The simulfrac can be more than 2 wells vs the older zipper fracs which were two wells no matter the pad size. Calling it a trimulfrac emerged last year, I think OVV (unowned) coined it, not sure. But yeah, it’s 3 wells. Really it’s just a simulfrac with more complex surface plumbing and I’d assume but don’t know, more horepower.

  40. 40
    zman Says:

    re 37 – potentially more sand, probably not less sand but it will depend on what the geology calls for. Standard disclaimer, I took a short rocks for jocks class and I have friends who complete wells for a living and I’ve been in the van and on the well site a few times but am no expert on this.

  41. 41
    zman Says:

    WTI rolling lower now. You may see trades from us today.

  42. 42
    zman Says:

    Bakken freeze off/winter disruption now < 0.1 mm bopd.

  43. 43
    Zorgnak Says:

    LBRT Hit short-term upside target at previous acceptance at 19.66. Would expect a pause.
    Weekly High volume break of the longer-term value range.

  44. 44
    zman Says:

    re 43 – looking for a move under $19 to add more into. Not feeling rushed.

  45. 45
    Zorgnak Says:

    WTI Short-term acceptance/support at 76.51.
    65 Minute Chart

  46. 46
    zman Says:


    CRK – We added to 100% natural gas, 100% Haynesville player CRK at average $7.815 as the name pulls back 5% with lower natural gas today and weak sentiment surrounding LNG (Biden Admin pause on new projects and a short term partial outage at Freeport that doesn’t meaningfully alter our thinking on spring trough storage levels which have improved markedly since the start of the year).

    At current levels CRK trades at 3.8x our 2024 Sub ($3.00 gas) EBITDA Case and 3.3x our Base Case ($3.50 gas) and offers an 6.4% implied yield on the base dividend while sporting middling debt and less outspending in 2024. We saw the name as a target later in 2024 or 2025 prior to the CHK for SWN acquisition and continue to see it being taken out as the next wave of LNG export capacity comes on line in late 2024 and 2025 for their low cost operations and expanding western play in close proximity to the US Gulf Coast LNG corridor. The Western play should transition from acreage adding and a few wells in 2023 to a more consistent delineation program this year which should help analysts to better scale it for inventory. CRK remains a long term core holding for Z4 and this add reduces our average cost to $10.61 and bumps them up to the #9 slot in the portfolio (they remain our 2nd largest gassy holding).

    Please see our recent update here for more color:


  47. 47
    zman Says:

    The blotter is updated


  48. 48
    zman Says:

    Jeff J – Message received, please check your email

  49. 49
    zman Says:

    Oil and NG reversed and now green.

  50. 50
    Zorgnak Says:

    WTI Demand volume trend is positive in multiple time frames. Value Range Highs/Resistance at 81.92

  51. 51
    zman Says:

    re 50 – nice, thanks.

  52. 52
    Skeptcl Says:

    Yemen’s Houthis Say Naval Forces Carried Out Operation Targeting British Oil Tanker Marlin Luanda In Gulf Of Aden

  53. 53
    zman Says:

    re 52 – thanks, sheesh.

  54. 54
    zman Says:

    adding to 52

    “Yahya Saree, a spokesman for the Houthi armed forces, said Friday in a televised statement that the Marlin Luanda was hit and was on fire.”

  55. 55
    zman Says:

    Rig Count Watch

    Oil up 2 to 499 vs 609 year ago
    NG down 1 to 119 vs 160 year ago

  56. 56
    zman Says:

    Fun fact:

    If everyone was as efficient as the big public gas players it would only take 40 to 45 gas directed rigs, assuming a steady state program with frac spreads follow rigs and just looking at the gassier shales, to maintain volumes in those major shales.

  57. 57
    Mo Says:

    Z – What about mex natgas exports? Where are you seeing it reach and further out?

  58. 58
    nrgyman Says:

    RE 56: If it takes only 45 rigs/spreads to maintain natgas production, what natgas production growth are we looking at with 119 current natgas spreads and all of the associated natgas from the 500 current oil rigs?

  59. 59
    zman Says:

    re 57 – thanks, thoughts

    1) it has under performed over time.
    2) there is a lot of cross border pipeline capacity, well in excess of the 5.5 to 6.5 Bcfgpd (in a good week) we are seeing.
    3) development of internal demand is not really the problem but good pipe access internally is.
    4) so for modeling purposes, we’re 6ish Bcfgpd for 2024, have been seeing some better weeks lately but would rather be conservative and the lack of visibility on that market keeps me from believing before seeing.

  60. 60
    zman Says:

    re 58 – thanks, note caveat about “if everyone was as efficient as”. Clearly not everyone that efficient. Also many rigs in the hands of privates have higher current PDP decline rates to deal with. See our December Macro update for thoughts on gas growth here:


  61. 61
    zman Says:

    Better week.

    Gotta go see intern #2’s training session.

    Have a great weekend,

    The Wrap will be out on Saturday.


  62. 62
    zman Says:

    The Wrap


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