re: amex
Sorry ORGA for taking so long to respond. Slow typing and slower mind. Please read attachments.
As of this point IMHO the position of shale production and frac problems are being resolved to the favor of the producers. I know we (USA) have abundance of gas and a potential of creating a major market for sales distribution.
The problem with the memo is the demand on the USA market is expanding at a major rate and the demand could increase 15 times and must be supplied from some source, or, the source of energy demand must change.
Electric autos as a source of reduction of the problem will not work. The solution resides in natural gas because it is a cheap source of fuel not only for the USA, but, for the world. There is no disposal problem with batteries etc, and cost reduction once demand is supplied will be great.
Does this mean that the volume in the USA will control the world demand? The answer is NO. The world demand is going sky high and the demand areas such as in Canada, USA and Australia will put a stabilizing effect causing the existing oil producing countries to reduce their controlling cost.
Just think of the demand in China alone in the NEAR future. The problem of producing clean natural gas is major at this point. The Browse Basin and the companies in the area will be a controlling force to contend with.
This does put gas and oil production and pipe lines to move it on the fast track in the USA. The major producers (big cap) are in the area of SSN big time now.
Does that mean that the small cap companies such as SSN will be bought up? I do not think SSN has to worry about this in the near future. However, the big and mid cap companies will be in merger positions on selective areas. This will reduce the takeover cost and improve cost utilization by including companies like SSN.
HAL will always be in the area with some company and SSN has an inside track. My feelings are they have not said “no” yet. This means that negotiations are going in my humble Cajun mind.
CHK sales had nothing to do with the value of the leases from SSN. Economics is the controlling factor.
I can go on for a long time. I think my position is SSN is in a good position and the next 6 months will show it. The natural gas is the future and we are a part of it.
